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CA4: Exactions Takings Claim Accrues When Owner Knows Of The Demand, Not When It Paid

As most of you probably already know, there's a demon lurking out there in takings claims. Not of the Levon Helm-narrated The Right Stuff variety, but maybe just as deadly in litigation.

That's right, the too-early-or-too-late thing (or in some cases, the too-early-and-too-late argument). Getting caught between arguments that a takings claim isn't ripe, and arguments that it is too late (statutes of limitation).

The U.S. Court of Appeals for the Fourth Circuit was dealing with the latter (a statute of limitations) in Epcon Homestead, LLC v. Town of Chapel Hill, No. 21-1713 (Mar. 20, 2023), but there are lessons in the case for the other side of the issue, ripeness.

The facts are pretty straightforward. If you are going to build at least five single-family units, the town's zoning ordinance contains a requirement of "inclusionary zoning" (aka affordable housing; aka below-market units. Or if you don't want to build such housing, you can pony up some cash if the town agrees.

The owner of the property wanted to build 63 units so was subject to this requirement. It didn't want to build affordable units, so opted to pay cash (approximately $800k). The town agreed, and conditioned its issuance of a special use permit which would allow the project to proceed on the developer paying this in-lieu fee: no certificates of occupancy would issue until the fee was paid.

Then Epcon bought the property. It built the 63 homes, and sold them. It made the first installment payment for the in-lieu fee, and two years later paid the final payment. Voila, certificates of occupancy. 

Next stop, state court where Epcon asserted the in-lieu fee was illegal under a variety of theories, including a section 1983 claim that the fee was an unconstitutional taking and violated Epcon's due process rights. The town removed the case to federal court and moved to dismiss the federal claims because the lawsuit was filed more than three years after the in-lieu condition was imposed (it had been four years).

As we all know, section 1983 does not have a built-in SOL, so the courts have held that the SOL of the closest state-law analogy applies. In North Carolina, that's three years. The District Court agreed with the town and dismissed. You snoozed, so you lose Epcon.

The Fourth Circuit agreed. We suggest you go read pages 9-11 of the opinion for the reasons why. The bottom line is that "there is no 'distinctive rule' in the Takings Clause context to apply for determining when the limitations period for a § 1983 claim begins to run[,]" and the usual ("standard") rule applies: a 1983 claim is ready when the plaintiffs knows or has reason to know that it is injured. Slip op. at 9. But when did the injury here occur?

Epcon argued it wasn't really injured until it finished paying. Not so, held the Fourth Circuit, it was injured when it learned of the special use permit condition after it purchased the property.

Here, Epcon alleges that it suffered an injury under § 1983 stemming from the application of an unlawful special use permit condition. As the district court concluded, Epcon first had reason to know of this injury no later than 2015, when it began purchasing the land subject to the special use permit. Thus, its claim that the permit condition violated its rights to just compensation and due process accrued at that point and extinguished three years later. By the time Epcon filed suit in October 2019, the sun had set on its federal claims.

Slip op. at 9 (footnote omitted).

The court rejected Epcon's argument that the injury occurred when it was compelled to actually pay the fees, and that happened when it went to the town for the certificates of occupancy. And this isn't a regulatory takings claim, Epson asserted. If it were, the SOL clock might have started earlier. No, this is an unconstitutional conditions claim, and that's different. Slip op. at 10. We didn't lose our property right until we paid, it argued.

We disagree, the court held. "The distinction Epcon attempts to draw between exactions and regulatory takings proves little more than that the government need not physically appropriate property to enact a taking." Slip op. at 10. [Barista's note: "enact" a taking?]

And here's your money quote: "Once the government conditions the grant of a land-use permit on the surrender of a landowner’s right to just compensation, a Takings Clause claim becomes cognizable." Slip op. at 10. In other words, once that happens, the lawsuit window is open and the SOL clock is ticking. In other words, the claim is ripe.

Remember that one the next time the government argues an exaction case isn't ripe because the action being challenged as unconstitutional (the government's demand, and the subsequent owner payment) isn't complete.

Epcon Homestead, LLC v. Town of Chapel Hill, No. 21-1713 (4th Cir. Mar. 20, 2023)

Exactions, Takings, And Ripeness...Oh My! When Planning Officials Say "No," That's Enough (Even If They Might Have Said "Yes" Some Other Way)

There's a lot to digest in the 36-page Order of the U.S. District Court for the Southern District of Florida in case that mostly concerns the validity of an exaction a small property owner was required to pony up in order to tear down and replace an old home on its land.

Megladon bought the residentially-zoned property in 2016 to tear down the existing building and build a new one. Simple enough, right? It demolished the old house, and applied to the Village to build a new one. But the Village also needed a road, and began making noise about a "possible road dedication." And sure enough, eventually the Village notified Megladon that "a certificate of occupancy will not be issued until dedication of the right-of-way is complete." Slip op. at 4. There's a dispute over exactly whose law requires such a dedication -- Village or County? -- but that's not terribly important for our purposes. 

Megladon balked, as dedicating a road would require it to reformulate its plans. There's apparently a procedure by which a property owner can request and exemption or waiver, but "Megladon refused because of the 'legal inconsistency of doing so[.]'" Slip op. at 4. Instead, it sued in a Florida state court. The Village then removed the action to federal court. After removal, Megladon amended its complaint to add an unconstitutional conditions claim.

The inevitable motion to dismiss under 12(b)(1) and 12(b)(6) followed.

Many pages of the court's order (mostly) denying the motion to dismiss are devoted to whether the plaintiff sued the right defendant. Important to the case and the parties, but not really of interest to us. If you might be, check out pages 9-23. 

Page 24 is where the interesting stuff heats up. The court concluded the claims are ripe over the Village's objection that -- you guessed it -- it has not yet reached a "final decision." Slip op. at 24. The court concluded "[t]his argument strains credulity[,]" because the Planning Director send Megladon an email that indeed "a certificate of occupancy will not be issued until dedication of the right-of-way is complete." To the court, this looked like a final decision:

Especially when we view this communication (from the Village’s Planning Director no less) in the light most favorable to the Plaintiff, we don’t think we’re going out on a limb by saying that it sounds a lot like a final decision. Director Olmsted made clear that the Village would issue the permit provided the Plaintiff acceded to the dedication. See ibid. “Provided” in this context means “with the provision or condition (that); it being provided, stipulated, or arranged (that).” Provided, Oxford English Dictionary Online, https://www.oed.com/view/Entry/153449 (last visited Mar. 1, 2023); accord Provided, Merriam-Webster's (defining “provided” as “on condition that, with the understanding, if only”). And, in case there was any doubt, Olmsted clarified that Megladon would “need” to consent (in writing) to the dedication “prior to” the issuance of any permit, and he was pellucid that the permit “will not be issued until dedication of the right-of-way is complete.” SAC ¶ 64 (emphases added). The word “will”—like the word “shall”—indicates the imposition of a mandatory condition. See Hewitt v. Helms, 459 U.S. 460, 471 (1983) (“[T]he Commonwealth has gone beyond simple procedural guidelines. It has used language of an unmistakably mandatory character, requiring that certain procedures ‘shall,’ ‘will,’ or ‘must’ be employed[.]”); Will, Oxford English Dictionary Online (“An utterance of the auxiliary verb ‘will’; (also) a command, promise, or determination expressed by such an utterance.”); Will, Merriam-Webster's (defining “will” as “used to express a command, exhortation, or injunction”); Scalia & Garner 112 (“Mandatory words impose a duty; permission words grant discretion.”).

And Olmsted’s unequivocal use of the phrase “will need” in relation to the dedication requirement puts to bed the Defendants’ bordering-on-frivolity contention that “the response to [the architect’s] email was not a refusal to continue processing the application absent a showing of dedication.”

Slip op. at 25 (footnote omitted).

This all in the context of an exaction or unconstitutional condition claim, where the bad act (according to the court) isn't that the government actually denied the permit asked for, but only that the government imposed the condition. Slip op. at 26.

The order noted that yes, the property owner could have gone further in the administrative process under the Village's procedures. But that's what we call "exhaustion." Id. ("But the Supreme Court has made clear that the unconstitutional-conditions doctrine isn’t subject to an exhaustion requirement." (citing See Pakdel v. City & Cnty. of San Francisco, 141 S. Ct. 2226, 2231 (2021)). And you don't need to exhaust in order to ripen a federal takings claim.

And here's the kicker: the ripeness requirement isn't some hard-and-fast "one application" rule, but rather "[t]o assert a plausible unconstitutional-conditions claim, therefore, a plaintiff need only allege that there’s 'no question . . . about how the ‘regulations at issue [apply] to the particular land in question.''" Slip op. at 27 (citing Suitum v. Tahoe Reg’l Plan. Agency, 520 U.S. 725, 739 (1997); Williamson Cnty. Reg’l Plan. Comm’n v. Hamilton Bank of Johnson City, 473 U.S. 172, 191 (1985)). And the availability of a variance isn't important, because "[i]n Williamson County, after all, the Court was concerned only with whether the plaintiff could seek a variance from the initial decisionmaker." Slip op. at 28.

Thus, the takings claim was not filed too early.

But, you know that -- as the court noted -- "the Plaintiff isn't out of the woods just yet[,]' because the Village also asserted the claim was filed too late. Slip op. at 31. Yeah, this happens a lot in takings-land, where you can be accused with a straight face of being both too early and too late. Check out pages 32-34 for why (it turns on the construction of the sovereign immunity waiver statute, if you are interested). 

Nothing resolved except the plaintiff is allowed to proceed. But as you all know, in takings law sometimes just surviving to continue the fight is a victory.

Order, Megladon, Inc. v. Village of Pinecrest, No. 1:21-cv-22819-ALTMAN (S.D. Fla. Mar. 2, 2023)

Denying Uses (But Allowing Discretionary Ad Hoc Exceptions) Isn't A Recipe For Rational Land Use

If a zoning statute or ordinance sets out the uses permitted in a zone, and the uses not permitted in the zone, and a property owner wants to make a use not permitted in the zone, all she needs to do is apply for a variance, or a Conditional Use Permit, or a nonconforming use permit, or a Special Use Permit, right? After all, isn't the point of these exceptions to bright-line use prohibitions to build in a large degree of flexibility and afford front-line regulators in the right circumstances the discretion to grant a use the legislature prohibited? One size does not fit all, does it? 

That was the issue that closely divided the Hawaii Supreme Court in Hoomoana Foundation v. Land Use Comm'n, No. SCWC-17-181 (Mar. 10, 2023). In a 3-2 opinion, the court concluded that when a use is expressly barred by a zoning statute (and yes, here it is a zoning statute because Hawaii has state-controlled zoning) you cannot ask for a Special Permit to make that use. The only way you can make a use expressly prohibited by the statute is to change the parcel's zoning.

The Case and the Issue

Here's the story. The Foundation wanted to set up an "overnight campground for homeless and commercial campers" (slip op. at 3) on land it leased, which was zoned by the State as Agriculture (B-rated soil, if you are interested):

16. Under Ho'omoana's proposal, the Project would consist of 2 acres, while the remaining adjacent 5.9 acres would be reserved as an agricultural field to be used by the campground occupants for therapy and work. It is envisioned that the [homeless] campers may work in the agricultural field to supplement their rental fees. Homeless campers are expected to pay $10 a night, while the commercial campers would be charged more. The camping fees are anticipated to underwrite the expenses of the campground. Although some of the campers may wish to participate in farming activities on the Property, there is no guarantee that the agricultural field would result in future agricultural productivity nor is there a current requirement placed upon the campers to engage in agricultural pursuits.

17. The 2-acre area of the Project would have up to 26 pods for tents accommodating up to 80 people. Tents are to be provided by the campers. It is intended that both the homeless campers and the commercial campers would be camping alongside each other. In addition to the pods, showers, toilet facilities, fire pits or camp stove areas, a paved parking area, and a charging station for campers are proposed. Homeless campers would be allowed to stay for two to three months or more as approved by the campground manager. It is unclear how long commercial campers would be allowed to use the grounds, but any stay would need to be approved by the manager.

Slip op. at 4.

Problem is, the Agricultural district doesn't seem to allow for overnight camping. The statute says that recreational uses like day camping is permitted, but expressly excludes "overnight camps" as allowed uses:

Within the agricultural district ... all lands ... shall be restricted to the following permitted uses: ... Public and private open area types of recreational uses, including day camps ... but not including ... overnight camps[.]

Haw. Rev. Stat. § 205-4.5(a)(6).

But an adjacent statute also allows a request for a Special Use Permit, for "unusual and reasonable uses within agricultural and rural districts other than those for which the district is classified." Haw. Rev. Stat. § 205-6. So what's the deal, can a county Planning Commission or the state Land Use Commission consider a special use permit to allow a use expressly prohibited by the zoning statute?

What Happened

The Foundation thought so, and asked the Maui County Planning Commission for a Special Permit to allow the overnight homeless and commercial campground project as a "unusual and reasonable use." The Foundation also had behind it a Hawaii Supreme Court case, Mahaulepu v. Land Use Comm'n, 71 Haw. 332, 790 P.2d 906 (1990), which held that a use not permitted under section 205-4.5(a)(6) might well be authorized via a special use permit.

But neighbors who object to the project asked the State Land Use Commission for a declaratory ruling that the proposed use of Agricultural land requires a zoning change (known in the parlance of Hawaii's statewide zoning scheme as a "boundary amendment"), and cannot be accomplished ad hoc by a discretionary special use permit.

The LUC agreed with the neighbors, concluding that the overnight camping project could not be approved by way of a special use permit, but that there must be a change in the zoning in order to allow it. By expressly prohibiting "overnight camping," the legislature had, in effect, already made the determination that overnight camping was not an unusual and reasonable use. Thus, no special use permit.

The Foundation appealed to a state trial court under the Administrative Procedures Act. It argued that the special use permit statute doesn't expressly preclude asking for an exception for uses prohibited by the zoning, and moreover, that Mahahulepu case held that doing so is just fine. The trial court bought the Foundation's argument and reversed the Land Use Commission.

Next stop, the Hawaii Intermediate Court of Appeals, which seemed to go both ways on the issues:

The ICA concluded it was bound by Mahaʻulepu, making the LUC’s decision contradicting Mahaʻulepu palpably erroneous. However, the ICA observed that the specific exclusion of overnight camps should control over the general availability of special permits in keeping with canons of statutory construction and furthering the statutory scheme.

Slip op. at 11.

Majority: The Statute Bars Overnight Camping, And That's That

Final stop, discretionary review by the Hawaii Supreme Court. There, a three-Justice majority (Nakayama, Wilson, Eddins) overruled the Mahahulepu case, and concluded that no, you cannot ask for a special use permit if the use you are seeking is expressly prohibited in the zoning statute:

HRS §§ 205-4.5(a)(6) and 205-6 are clear: the “public and private open area types of recreational uses” of “dragstrips, airports, drive-in theaters, golf courses, golf driving ranges, country clubs, and overnight camps” are not permitted on class A and B agricultural land, and cannot be permitted by special use permit.

Slip op. at 19-20 (footnote omitted).

Relying on statutory text, legislative history, and the canon of statutory construction that the specific controls over the general, the majority concluded that the point of chapter 205 is the protection and preservation of agricultural lands, and allowing a use to be made of agricultural land that is expressly prohibited by the zoning statute would not "promote the effectiveness and objectives of this chapter" as the special use permit statute requires. Slip op. at 18.

Having concluded that a special use permit isn't the way one might ask to establish an overnight campground on agricultural land, the majority held that the only way for the Foundation to get its overnight camping project approved would be to seek a "boundary amendment" (aka zoning change) to change the zoning from Agricultural "to one where recreational overnight camps are permitted." Slip op. at 21.

As for Mahahulepu? Overruled. That decision was the product of "flawed" reasoning (that case held that golf courses, another use expressly prohibited by the statute on Agricultural land, could be approved by way of a special use permit), and "failed to engage with the plain language of [the statute] prohibiting certain uses[.]" Slip op. at 22.

Dissent: The Statute Prohibits "Recreational" Uses, Which This Isn't

Two Justices (Chief Justice Recktenwald and Justice McKenna) saw it differently. Stare decisis cautions against lightly overruling cases that are only 30 years old, "[w]hether or not we agree with its reasoning[.]" Dissent at 2. After all, the legislature has had ample time to supersede Mahahulepu, but it hasn't done so.

More interestingly, the dissenters did not view the proposal for an overnight homeless campground as a "recreational use" included in the statute's express prohibition. Dissent at 9-10 ("An overnight campground for unsheltered persons is not a 'recreational' use."). Thus, at least that part of the project might be subject to approval on Agricultural land, because the statute only bars "recreational uses" (and then lists out examples, including overnight camping. The dissenters also were troubled by the Land Use Commission barring the Foundation from intervening in the declaratory ruling process initiated by the neighbors, "some of whom asserted 'not in my backyard' concerns. Dissent at 14-15 (footnote omitted).

Some Thoughts On Bright Lines and Ad Hoccery

Overall, this one isn't terribly surprising, given the Hawaii Supreme Court's wanting to keep a tight rein on land use issues, and its record of reading exceptions to the court's view of the meaning of statutes and ordinances very narrowly. The court, for example, falls squarely in the "narrow" approach to variances.

And we have to agree more with the majority on this one, but for slightly different reasons. We don't really focus on the statutory interpretation as the majority reasoned (after all, it seems you might read the statute both as the majority and as the dissenters did). Instead, we see this one as a push in the correct direction on a larger-scope issue. That being what we see as a trend in land use regulation to paint with a very broad brush in a statute or ordinance, and then rely on administrative or agency officials to exercise discretion to craft ad hoc exceptions. 

To us, this is a bad trend. The problem with "ban use X by law, but allow a discretionary process that might allow use X" is that it shifts the locus of land use regulation from elected officials and legislative judgments to discretionary administrative determinations made by unelected officials (aka bureaucrats). It also seems to favor old-hand insiders who know how to play the system, legally or otherwise. It might not matter whether you can read the law, but it does matter who you know at the Planning Commission or the Land Use Commission.

Bear with us while we play this out. Let's say the legislature has decided to prohibit certain uses in a certain zone and writes the statute or the ordinance that way. Landowners may not like the restrictions because, well, they are restrictions on their use of their land, but at least having a clear line about what is allowed and what isn't fixes a position to which property owners can react and plan. But let's also say that the legislature also includes in the law that in specific cases, an administrative official has the discretion to effectively overrule the legislature's judgment and permit a use that is expressly prohibited. This leaves what should be legislative judgments up to the discretion of nonlegislative officials. 

What's wrong with that, you ask? After all, as noted at the start of this post, one size does not fit all and shouldn't the law itself account for situations in the grey areas that cannot be accounted for when a legislature regulates property? Don't we want to provide landowners with the chance of making a certain use of their property even though a zoning ordinance or statute prohibits it? Flexibility!

It's All Discretionary, Son

In our view, the "everything is discretionary" approach is a recipe for administrative gamesmanship, and runs counter to the idea that to be a valid exercise of police powers, land use regulation should be comprehensive and part of a bigger plan. Maybe more importantly, this type of scheme not only makes arbitrary decisions more likely, it allows government to create "permit purgatories" where property owners are sent to wither on the vine, especially where the legislatively-adopted regulation bars all uses.

In those cases, instead of having to face the takings music for a regulation that prohibits all economic uses, the government gets off the hook if it can point a court to the mere possibility that it might waive, overlook, or vary the restriction. And once a court hears from the government that there is some theoretical possibility that the use prohibited by the statute or ordinance might be allowed if only the property owner asked the right person in the right way (and that person makes a response that can be deemed "final") the judge's interest switch turns to "off" and the court can confidently kick the case for being unripe. We are referring of course to the "final decision" requirement of Williamson County. Because when there is any discretion in the process, courts are loathe to evaluate takings claims on the merits, on the theory that the government might -- just might! -- exercise its discretion and allow what its own statutes or ordinances plainly and expressly prohibit.

Discretion is Often Designed for Permit Purgatory And Takings Avoidance

Perhaps the most glaring example of how this dynamic enables administrative and judicial gamesmanship is California Public Resources Code § 30010, which has been interpreted as providing both the California Coastal Commission and local governments the complete and total discretion to overrule or ignore any restrictive regulation in the coastal zone, if the CCC or a local government can be convinced by the property owner that to apply the statute or ordinance as written would result in a taking. And believe us, the California Coastal Act and local coastal ordinances are full of restrictions that prohibit any and all economically-beneficial uses. But because section 30010 seems to leave open the possibility that these restrictions may be waived ad hoc (if only the property owner asked the right person the right way), courts never get to the merits. "Just ask for an exemption," they counsel landowners, ignoring protestations that these discretionary approvals are more imaginary than a real possibility, and that assembling a request to exercise discretion can be eye-wateringly expensive.

You don't have to be in the land use game all that long to see the evil genius in this, at least the way the courts read this statute: not only does this put the owner into permit purgatory where government is incentivized to avoid taking a concrete position about what its restrictions allow and what they prohibit, this procedure forces a property owner to present her constitutional takings claims to the very government that she claims is violating her rights, upon pain of a 12(b)(1) or 12(b)(6) dismissal if she files a takings lawsuit before the government responds. Yet the Supreme Court says it does not require exhaustion of administrative remedies in takings cases.

What About Euclid?

But these discretionary purgatories take the foundation of the constitutionality of zoning as expressed in Euclid -- the assumption that land use regulations are constitutional because they are the product of big picture thinking and a comprehensive plan -- and inverts it so that every decision is discretionary and case-by-case. The reality is that these "exceptions" are granted rarely, and the process isn't so much designed to get to a "yes" or "no" on what uses might be allowed on a particular parcel, but are often there more as a "takings avoidance" tool like section 30010, where property owners are forced into an open-ended maze and the government does everything it can to strenuously avoid making any decision. That way, the owner remains stuck in the discretionary maze, never to receive an answer, until the owner throws in the towel, after bleeding out financially or spiritually.

This is rational land use planning?

It isn't, but most federal courts have accepted it as the way the land regulation game is played. So kudos Hawaii Supreme Court, for holding the legislature to what it said in the statute, and not allowing unelected members of a county planning commission or the state Land Use Commission decide that in this case, the statute is meaningless.

Hoomoana Foundation v. Land Use Comm'n, No. SCWC-17-0000181 (Haw. Mar. 10, 2023)

One Guess What The Second Circuit Did With A Takings Challenge To Rent Control

Let's say you know nothing else about an appeal except it is being decided by the U.S. Court of Appeals for the Second Circuit, and the case is a constitutional challenge to rent control. What's your best guess about the outcome (the district court dismissed for failure to state a claim)?

When the Second Circuit issued its summary order in just such a case last week -- a challenge to the "Housing Stability and Tenant Protection Act of 2019" -- we decided to undertake a little unscientific poll to see whether others out in the Twitterverse predicted as we did.

Looks like so. Yes, the sampling size was small, and the respondents were only those who voluntarily offered their thoughts. But 95% accurately predicted that the property owners would lose, as the Second Circuit indeed held in an appellate court's version of "laughing heartily" at an appellant's arguments: an unpublished summary order.

We could spend the rest of this post going through all of the reasons why the Second Circuit didn't find a scintilla of reversal in the property owners' arguments. But the Order is so short, you might as well read it yourself.

Short story: facial claim? Nope, no physical taking because you fool landlords let tenants in your properties. No facial reg take either, because "different landlords have greatly varying expectations." Order at 4. Rather than serve as an apt illustration of why the "expectations" part of the Penn Central test focuses on an irrelevant inquiry, the Second Circuit effectively concludes that reg takings claims can never be raised as facial claims. 

Same outcome for the as-applied claims: no plausible allegation of a physical taking because there's still the possibility of getting tenants out, and owners are not prohibited from exit the rent-controlled market by getting out of the rental market; the law merely "restricts a landlord's ability to profit by converting a rent stabilized unit to a market-rate unit[.]" Order at 6. And, for good measure, these claims are not ripe because the owners didn't plead that they tried to get anyone out. As for the as-applied regulatory takings claim, the claim is not ripe because the complaint does not allege that the owners tried to take advantage of any of the non-futile procedures to obtain a hardship exemption. And even if ripe, the owners lose "on the merits." (Remember this is an appeal from at 12(b)(6) dismissal, so what "the merits" has to do with anything is beyond us.)

So what might the 95% response indicate? People have very good predictive powers? Our colleagues are as cynical and jaded as we are? Constitutional challenges to rent control are so lacking in merit and plead-worthiness that courts rightly laugh them out of court? The Second Circuit is predictable but in other circuits you might get a more balanced view?

Or maybe -- just maybe -- something else is at play here, and, like a lot of other courts have done before it, the Second Circuit isn't about to upset the apple cart and do anything to undermine what started off, like a lot of these things do, as an "emergency" measure now fossilized into an untouchable entitlement (but an entitlement that is not paid for by the taxpayers, but by private property owners)? In these cases, the lower courts aren't likely to do doodly-squat, and rent control cases will be pushed up to the Supreme Court until that Court does something more than repeatedly decline to review the issue.  

Summary Order, 335-7 LLC v. City of New York, No. 21-823 (2d Cir. Mar. 1, 2023)

New Article: "Toward Principled Background Principles in Takings Law" (Strahilevitz & Hansen)

Check this out, a new article co-authored by a federal judge's law clerk and lawprof Lior Strahilevitz (Chicago). With the title, "Toward Principled Background Principles in Takings Law" are we going to read it? You bet. (Unlike a lot of new scholarship that we post here, we read this one immediately.)

Here's the Abstract:

Blunders made by lawyers, judges, and scholars have caused the Supreme Court’s recent opinion in Cedar Point Nursery v. Hassid to be deeply misunderstood. In Cedar Point, the Court re-wrote takings law by treating temporary and part-time entries onto private property as per se takings. Prior to Cedar Point these sorts of government-authorized physical entries would have been evaluated under a balancing framework that almost invariably enabled the government to prevail. As it happens, there were two well-established rules of black letter law that California’s lawyers and amici mistakenly failed to invoke in defending the Cedar Point union organizer access regulation. First, a physical takings claim accrues when a regulation authorizing third parties to enter private property is promulgated, not when the third party actually enters the land. Second, only the party that owned the land at the time the physical taking cause of action accrued can prevail. Under these doctrines, Cedar Point Nursery’s lawsuit was filed decades too late. By the wrong plaintiff. California’s oversights were probably outcome determinative.

Moving beyond Monday-morning quarterbacking, we argue that the statute of limitations arguments available to governments in future cases help provide the essential limiting principles that went unmentioned in Cedar Point. In the aftermath of Cedar Point prominent scholars denounced the opinion as a vehicle for gutting antidiscrimination law, labor law, environmental law, rent control, and other parts of the regulatory state. Our analysis reveals that these concerns are likely exaggerated because defenders of those long-standing limits on the right to exclude can invoke the statute of limitations arguments that California’s lawyers failed to raise. On the other hand, new restrictions on owners’ rights to exclude are vulnerable to legal challenge. Properly understood, contemporary takings law grandfathers in many longstanding limits on the right to exclude while constraining governments that wish to tackle collective action problems by restricting property rights in new ways. Moreover, statutes of limitations and related doctrines can provide courts with something that has been elusive since the Supreme Court’s 1992 takings decision in Lucas v. South Carolina Coastal Council: a principled and coherent account of what restrictions on owners’ rights are impervious to takings claims because they qualify as background principles of state property law.

Read it at SSRN.

[Before we go on, Disclosure 1: my law firm represented the property owner in Cedar Point Nursery, so yes, I have a dog in the hunt.]

What do you think of the article's premise and conclusion that a regulation alleged to allow a physical invasion must be brought when the regulation is adopted, and not when property is actually invaded?

Government lawyers need not and should not repeat the mistake that California’s lawyers made, a goof that evidently went unnoticed by all three dissenting justices, all thirteen amici, and every scholar who has written about Cedar Point. By correcting Cedar Point’s litigation strategy blunder, governments may avoid having to compensate landlords who want to refuse to rent to members of a protected class, landlords whose ability to evict is constrained by rent control laws, employers who wish to fire workers involved in unionization efforts, and business owners who want to bill governments for the inconvenience of having to endure entry by health and safety inspectors. Most of these claims brought by property owners should fail if defended by competent government counsel who can learn from California’s error.

Id. at 5 (footnote omitted).

In other words, the allegedly unconstitutional act is the enactment of the regulation, and not also the failure to provide compensation when an invitee subsequently exercises the rights granted by the regulation to enter the plaintiff's property against the owner's wishes.

And what of the article's other premise, that regulations allowing physical invasions and occupations of property over time become "background principles of the State's law of property and nuisance" and disappear upon conveyance of the property?

Understandably, many observers were unnerved by Chief Justice Roberts’ decision to brush aside the notion that the California regulation – just seven years younger than the Fair Housing Act – was a background principle of state property law, unnerved many observers. If the 1975 California statute and regulation do not count by 2021 as background principles that inhere in title why shouldn’t the 1968 Fair Housing Act suffer the same fate? The response to Cedar Point from the least alarmed property scholars fell back on the idea that the Court would nonetheless treat the Fair Housing Act as a background principle. But no one has a good theory – other than a realist reading of the justices’ relative hostility to the goals of labor law – for why something magical happened between 1968 and 1975. After Cedar Point it is quite challenging to conclude that there are any principles at all underlying the Supreme Court’s conception of background principles. Our goals in this article include articulating coherent principles that are grounded in existing law and consistent with what the Court decided in Cedar Point.

Id. at 17 (footnotes omitted). 

Some preliminary impressions:

Are all physical invasion challenges facial claims? The article's premise seems to eviscerate the longstanding distinction in constitutional law generally -- and takings law specifically -- between a facial challenge and an as-applied challenge. The window opens on a facial challenge on behalf of everyone when a regulation is adopted, but we thought it was settled that individual property owners had to wait -- upon pain of being tossed out on ripeness grounds --  for the challenged regulation to actually be applied to their facts and circumstances. But the article does not mention the facial vs as-applied distinction.

Standing before incurring a concrete injury? The argument also seems a variation of the Federal Circuit's rationale in Campbell v. United States, 932 F.3d 1331 (Fed. Cir. 2019), where the court held "[i]n the case of a regulatory taking, however, the taking may occur before the effect of the regulatory action is felt and the actual damage to the property interest is entirely determinable." Disclosure 2: we thought the Federal Circuit's reasoning in that case was faulty (that a property owner has an obligation to sue even before she is actually injured seems very strange), and petitioned for certiorari (denied). But it does seem like a weird rule, and very much at odds with injury-in-fact and Article III standing requirements.

Whither Kirby Forest? The rule also seems at odds with Kirby Forest Indus. v. United States, 467 U.S. 1 (1984), where the Court upheld all sorts of government actions that muck around with an owner's property rights prior to an actual judgment and tender of compensation in eminent domain cases. No, the Court concluded, the "taking" takes place in straight takings when there's been an adjudication of compensation and a tender of actual payment. And all those things which happened before that interfere with the owner's use -- like instituting an eminent domain action, filing a lis pendens and clouding title, drying up the market for the property, and similar -- do not interfere sufficiently with property interests because "petitioner was free to make whatever use it pleased of its property." Id. at 15-16. The California provision seems similar: until the union organizers actually entered Cedar Point property under color of the statute, the owner could exclude whom it wanted.

Too early and too late: You just know that if property owners had challenged the California statute as a taking upon enactment, but before anyone had actually attempted to enter under the authority of the statute, that the claim would not have been that they filed too late, but rather too early. Property owners are used to these type of inconsistent arguments and being whipsawed between being accused of filing too early, or too late (or, in many cases, both too early and too late at the same time). We don't think that the line the courts are going to enforce between ripeness and staleness is as clear as the authors make it out to be.

Get ready for more takings claims, federal courts. Unless the article is arguing for abandoning the remaining takings ripeness requirement (something we're down for, but so far the courts are not), we're not sure that a rule that will force prudent property owners to sue upon adoption of new regulations is one that the courts will enthusiastically embrace (even if they should).

Zombie takings, or zombie statutes? The article describes Cedar Point as a "zombie takings claim" (p. 33) because it challenged a statute originally adopted decades ago. It argues that after about 40 years, regulation ossifies into a background principle, immune from challenge. Even though we'd use the "zombie" label to describe the California statute and others like it that are there on the books but are pretty obscure, let's go with the zombie takings label. That brings up an intriguing tradeoff: would we surrender Cedar Point and the ability to challenge 40 year old regulations in return for eliminating the ripeness hurdle and opening up courts to immediate challenges of newly-adopted regulations as we think the piece is advocating for? Hmmmmm... we gotta think about that one.

Cringe. No matter what, we think that calling the Cedar Point outcome the result of "blunders" by lawyers, judges, and scholars (p. 1), the government's strategy a "goof" (p. 5) and "bad lawyering" (p. 48), its lawyers "bone-headed" (id. at 49 & n.314), and accusing government counsel of committing "a colossal strategic blunder" (id. at 2), and saying that the government's lawyers in Cedar Point and Lucas committed "legal malpractice" (id.), is unnecessary and uncharitable in the extreme. We get that the authors don't care for the outcome in Cedar Point and wish their "Monday-morning quarterbacking" strategy (their words not ours, see p.1) would have been raised and tested. But in our view, these type of accusations should not be thrown about lightly, especially by those who didn't enter the amici arena themselves, and by those who don't appear to have been there, done that because their collective time actually practicing law and making strategic litigation decisions in real time in real cases appears to be, let's say, very limited. We hope there can be even vehement disagreement about the issues without slinging accusations of malfeasance, incompetence, and especially malpractice -- claims the practicing bar takes very, very seriously. We respectfully urge the authors and the law journal editors to reconsider these characterizations prior to print publication. 

We're going to meditate on the article and its arguments more. But whatever you may think of the authors' analysis and conclusions, this piece is well worth reading.

Ice Ice Baby: A Report From The 40th ALI-CLE Eminent Domain & Land Valuation Litigation Conference, Feb 1-4, 2023, Austin

We were eagerly anticipating 40th American Law Institute-CLE Eminent Domain and Land Valuation Litigation Conference. The 2022 Conference in Scottsdale was one of the first meetings where everyone was back in-person (and was a smashing success), but that conference was early in the game so not everyone could or would attend. But in the past year most of us got back to some semblance of "normal," and the turnout promised to be good.

We had record registrations: with over 300 attendees, faculty, and staff signed up, things were shaping up.

Plus, we were headed to Austin, Texas. The last time we held the Conference there in 2016, we loved it so much it has been in-demand for a return visit. And this year is the debut Conference for some new planning co-chairs for both the main tracks as well as the "Condemnation 101" tracks, so the buzz for the 2023 Austin Conference was building.

But then the weather reminded us that Mother Nature is often the boss. 

Very Icy Austin on Wednesday (Conference Eve).

On Tuesday, one day before the Conference was to get underway, the 2023 Central Texas Ice Storm blew in and things were gonna get (as they say) "challenging."

Austin Airport effectively shut down with few flights in or out. Planes and cancellations stacked up nationwide. And even for those nearby, slick icy roads, and seemingly everything was closed, from gas stations to hotels to restaurants. Widespread power outages. 

Were we ready with Plan B if people couldn't get on-site? Read on.

Unless you are already here or are driving,
you ain't getting to Austin via AUS any time soon, pard.

Even flying from sunny California was a problem.

Ticket agent: Austin flight cancelled. How about flying to Houston and then driving?

Me: Sure, that'll work. Just get me to Texas and I'll figure it out from there.

Improvise, adapt, overcome: planes, trains, and automobiles (and car rentals, and long-distance rideshares, and four-layovers-from-Boise flights). Jacksonville to Austin via Chicago and Nashville.

Although those of us who made it to Austin were receiving widespread reports of people delayed and rerouted, we had only a handful who said they would not be pressing forward to get here. 

When this is what greets you when you arrive
at your conference site...uh oh.

And yes, Austin was cold and icy. Most things shuttered and widespread loss of power. But the Conference venue was up and running, and throughout the day on Wednesday, faculty, staff, and attendees were showing up. Trickling in, but showing up or on the way.

When this is what you see at the United Airlines
luggage counter, you ask yourself:
Can I make my presentation in a t-shirt and sweats? (Yes!)

We had confidence, and were prepared
for everyone to get to Austin.

So the aforementioned Plan B went into effect. Agenda items shuffled from tomorrow to today because the speaker is here, now. One speaker in the room, one speaker remote. Our audience is full of experts ... say, Billy can you pinch-hit on this panel? Sure. One speaker remoting in from his (unexpected) hotel room in Phoenix and presenting, before he went to the airport in the afternoon to continue on to Austin.

And so forth. Our long-time ALI-CLE Program Attorney, Amy Weinberg (who was delayed out of Philadelphia) was working furiously behind the scenes doing a lot of juggling, updating, texting and calling, and making alternative arrangements. And the tech team from ALI-CLE was preparing for overload if needed.

Plan A: continue to set the room up, assuming everyone is here or on the
way, and we'll have most or all of our people in the room.

Our Planning Chairs were ready, even if not
all of us were actually there (yet).

Plan B: the ALI-CLE technical crew was prepared to livestream
and record the Conference if the weather made travel
to Austin impossible or infeasible.

The tech command center.

Before we go on, a big thank you to our generous sponsors.
Without your support, this Conference would not be as
good as it is, year after year.

We're underway, with a pretty good crowd.

Thursday morning, 9:00 a.m., and we're looking not too bad. A fair number of folks have pressed forward despite the weather and travel disruptions and are in the room. More report they are not tapping out, and are pressing onwards.

We have more viewers remote than we originally anticipated, but the tech is holding up.

Over the next couple of days, our lawyers, judges, legal scholars, appraisers, law students, right-of-way agents, relocation experts, property owners, and other related professionals made their way to Austin.

The fact that folks who were experiencing some rather dramatic travel difficulties and delays (ask Jack about his late night Uber from Houston airport to Austin, or how our west coasters got re-routed all over creation), didn't quit but were determined to get to Austin told us something about why this Conference has been so successful over the decades.

It's more than great programming from the nation's experts. The Conference is also an essential venue to get acquainted with new colleagues and welcome them to the Dirt Law Bar, reconnect with long-time friends, and have a bit of fun together.

Most of the Conference attendees eventually made it, and very few (reasonably) threw in the towel and turned around for home. This was the 40th edition of the Conference, and we really know why it is one of the most-established and successful conferences in the ALI-CLE stable of programs. This year's experience really drove home why we come, and why our attendees and faculty are so dedicated and committed, despite the sacrifices we make to attend or to present. 

Hybrid: Pacific Legal Foundation's John Groen
remoting in while en-route via Phoenix, and
Baylor lawprof Jessica Asbridge on
"Everything Old is New Again: Why Today’s Practitioners
Need to Understand the Original Meaning of the
Takings and Just Compensation Clauses."


The "Condemnation 101" track was wildly popular
both with new members of the Eminent Domain Bar,
as well as old hands. Standing room only throughout the day.

We also had reports from the field that the remote viewing
was going well. Here's how we looked in the
mountains of North Carolina.

Let's not forget the substance of the Conference.
Lots of practical learning. Here's Hawaii's Mark Murakami
and Virginia's Steve Clarke on "Avoiding the Real Jeopardy:  
Structuring Eminent Domain Settlements."
And no, two-time Jeopardy! champion Steve did not
give answers in the form of a question.

Weather throughout Wednesday and Thursday was icy and nasty,
but towards the end of Thursday seemed to be clearing up.

Consequently, the view from the podium looked better and better
with more showing up and more reporting they were nearly there.

The programming at the Conference is traditionally
a mix of practical subjects and the more theoretical.
Here's one of the highlight latter programs,
Alan Ackerman (Michigan), Matthew Ackerman (also Michigan),
and Steve Davis (Missouri) on "What Does the Supreme Court
Mean When it Says Just Compensation is “Self-Executing?"

There's an ethics program, naturally, for those of us in jurisdictions
with mandatory CLE requirements. But we try and not do "typical"
(i.e., boring) ethics programs. Here's Sarah Kellner (Colorado) and
Shane Rayman (Ontario, CN) on "Ethics: Building Your Practice
by Mentoring the Next Generation of Eminent Domain Professionals."

An example of our practice-oriented programming: Tony DellaPelle
(New Jersey), Bernadette Duran-Brown (California), 
and Andrew Lines (Illinois) on "Preparing Your Expert
Witness to Shine in Virtual Proceedings:
Tools and Tips For Trial Lawyers." 

Andrew actually pretended he was far, far away for his "deposition"
when he was in fact one floor up from the Conference room.
Way to go all-in.

Thanks to our generous sponsors, we were able to avoid Austin's
icy roads and have our Mickelthwait barbecue
brought in for lunch. Was it well-received? See for yourself. Line
was through the lobby and nearly out the front door.

Thank you to Texas Supreme Court Justice Jimmy Blacklock
for speaking on "Developing Property Right Issues in Texas,
Questions and Answers with Justice Jimmy Blacklock"
(interviewed by Justin Hodge (Texas)

It was not an echo-chamber either. Here, in a hotly-debated
session, Jeff Redfern (Virginia), Steve Silva (Nevada), and
Lawprof Emilio Longoria (St Mary's Law, Texas)
debate "When the SWAT Team Comes (No) Knocking:
Police Power Takings."

Jeff, Steve, and Prof Longoria's session got everyone's blood pumping.

It wasn't all serious, and we had a bit of fun.
Like this after-hours live edition of the Eminent Domain & Right of Way
Clubhouse with Beth Smith (Wisconsin), Patrick McAllister (Indiana)
and some dude who was having a post-CLE session beer.

Some of our faculty are more formal and like to speak
standing at the lectern. Here, Pacific Legal Foundation's Jon Houghton
(New Jersey) and Ben Stormes (Montana) on
"Avoiding Pitfalls When Trying a Penn Central Case:
Lessons From the Takings Trenches."

Others are less formal, and speak while sitting
(and wildly gesticulating to make sure you are paying attention).
Kristen Renfro (California), and some guy on
"Your Regulatory Takings Case is in Federal Court – Now What?"

By Friday morning, the Austin weather was looking up. Really up.
And we nearly had everyone in the room.
By hook or by crook, most everyone was there.

By Friday were were pretty much back to normal.
Nearly all faculty and all attendees in the room.
And thus we turned it over to our Saturday morning stalwarts,
starting with Jim Burling, here speaking about "The Many Theories of
Property - Do They Matter in Court?" (and Pufendorf)

No one wanted to miss Michael Berger's "Regulatory Takings Update"
on Saturday morning either.

When you can fill this many seats at a CLE conference on a
Saturday morning after two full days of programming,
you know your speakers are the
right ones (thank you Jim and Michael).

After Jim and Michael did their thing, we held our "National Forum,"
a moderated "open-mic" session where Conference attendees
take to the podium and speak about their case or issue,
or crowdsource a question. Here, Pacific Legal
Foundation's Kady Valois, speaking about
our firm's latest takings cert grant.

We were happy to announce that the 41st ALI-CLE Eminent Domain &
Land Valuation Litigation Conference will be held February 1-3, 2024,
at the JW Marriott in New Orleans.
Save the date!

Ivy Cadle (Georgia - Go Dawgs!) is already planning his trip to
#EminentDomain 2024 in New Orleans.
See you there, Ivy.

With the programming wrapped up, it was time for farewells
and thank yous. Here, four of our law students from William and Mary Law,
who took the time out of their schedules to make their way to
Austin for some real-world learning and networking.
Well done, new colleagues!

Even after the proceedings closed, there was more work to be done.
Here, the ALI-CLE Tech Team breaks it down, after successfully
guiding us through the past four days. They are a large part of the
reason why this Conference works so well (plus, they make the
speakers look really good on camera).

To those who joined us - in-person or on-line, thank you. This conference reminded us of why this program is so successful, and why we all return year-after-year.

To those of you who didn't (or couldn't) join us, here's what you missed. You need to remedy that, and come join us next year in New Orleans...

We'll see you in New Orleans for
#EminentDomain2024!
(Want to keep the conversation going in the
interim? Join the ALI-CLE Eminent Domain Conference
page on LinkedIn.)

"Emerging Issues In Property Rights" - Wednesday, February 8, 2023, 3-4pm ET (Free!)

Join our Pacific Legal Foundation colleagues Jon Houghton, Daniel Woislaw, Kady Valois, and Sam Spiegelman (moderating) tomorrow, Wednesday, February 8, 2023, at 3:00 - 4:00 p.m. ET for a free webinar, "Emerging Issues in Property Rights."

Here's the agenda:

Protecting private property rights has been at the heart of PLF’s work since our founding in 1973. Our view, and that of the American Founders, is that property rights are foundational to all other constitutional rights.

Our relentless defense of property rights has secured many precedented victories, including 12 property rights wins at the U.S. Supreme Court—and counting.

Unfortunately, even today, the need for property rights champions remains critical.

Government officials too often relegate property rights to second-class status among Americans’ constitutional rights—cloaking their assaults in erroneous assertions of environmental protection or cleverly constructed land use restrictions.

To learn more about property rights’ legal landscape in 2023, join us for part two of our four-part webinar series, Emerging Issues in Property Rights. Our panel of PLF attorneys will preview the road ahead for property rights and strategies to restore these fundamental rights to their rightful constitutional status.

Join us, and register here (free!).

(Nearly) Last Call: There's Still Time To Join Us For The 40th ALI-CLE Eminent Domain & Land Valuation Litigation Conference, Feb 1-4, Austin

We really want you there...

One (nearly) last reminder that there's still time to register for your space at the 40th ALI-CLE Eminent Domain & Land Valuation Litigation Conference, February 1-4, 2023, in Austin. In the past several years, we have sold out due to the conference room capacity and the conference hotel block. But there's still space, although we are nearly full. So register now - don't delay any further! 

Here's the brochure with the complete agenda, schedule, and faculty listing. But to tempt you, here are some of the highlights of the program:

• Everything Old is New Again: Why Today’s Practitioners Need to Understand the Original Meaning of the Takings and Just Compensation Clauses
  
• When the SWAT Team Comes (No) Knocking: Police Power Takings

• Private Utility Takeovers – Lessons From a 67 Day Trial

• "Contraband": How Property Rights Helped Pave the Way for Civil Rights

• Valuation Issues When Billboards and Signs are Condemned

• Setting Client Expectations and Identifying Red Flags

• Preparing Your Expert Witness to Shine in Virtual Proceedings: Tools and Tips for Trial Lawyers

• Developing Property Right Issues in Texas - Questions and Answers from the Bench (with Texas Supreme Court Justice Jimmy Blacklock)

• Eminent Domain and Regulatory Takings Updates: Important Decisions You Need to Know

• Ethics: Building Your Practice by Mentoring the Next Generation of Eminent Domain Lawyers

• the Condemnation 101 program (a one-day course for those new to the practice, or for experienced practitioners wanting a refresher)
• ...and much more!

To register, go here.

Looking forward to seeing everyone in Austin for the 40th edition of the Conference.

Program Brochure, 40th ALI-CLE Eminent Domain & Land Valuation Litigation Conference, Austin, Texas, Feb 1-...

The Good The Bad And The Ugly: There's Something For Everyone In This Florida Takings Opinion

Here's the latest from a case we've featured here before.

There's something for everyone in the Florida District Court of Appeal (Second District)'s opinion in Jamieson v. Town of Fort Myers Beach, No. 2D21-2722 (Dec. 29, 2022).

Let's start with the outcome: the court reversed the trial court's summary judgment in a wetlands takings case, sending the matter back for a trial. Sounds good.

But let's back up a sec. The case started a long time ago, when Jamieson's seven-acre residentially-zoned property was designated as a wetland, resulting in a use density decline from 40 buildable lots to zero (wetlands density is one residence per 20 acres). For a decade, Jamieson tried to "change and/or correct the wetlands designation[.]" Slip op. at 3. The opinion lists out his efforts. He tried for

an application for boundary clarification regarding the extent of the wetlands, a request to transfer the residential density from the affected lots to another parcel, a request for an administrative determination that the wetlands designation was inaccurate as demonstrated by a South Florida Water Management District (SFWMD) survey that determined that the property was only sixty-one percent wetland, a request for a minimum use determination (MUD) to establish that the platted lots were entitled to residential development despite being "nonconforming," and a request for a variance from the Town's Land Development Code to allow development in accordance with state guidelines, which allowed development on wetlands with mitigation.

Slip op. at 3-4 (footnote omitted).

When "[a]ll of his efforts failed[,]" he filed a Bert Harris Act notice of claim. In response, the Town offered to settle by removing the wetlands designation on three lots, provided Jamieson surrender development rights on the remaining 37 lots. No thanks, he replied, and sued for a taking, both a Lucas categorical, and a Penn Central ad hoc.

As you might predict, this was just the opening of the second phase of his odyssey. The trial court granted the Town summary judgment on ripeness (which the court of appeal eventually reversed). The court of appeal reversed and remanded.

Back in the trial court, after a series of cross-motions for summary judgment (see page 5 of the slip opinion), the court denied Jamieson's motions, and again granted the Town's.

Back up to the court of appeal.

The Good: The court rejected the trial court's rationale for granting the Town summary judgment on Jamieson's categorical takings claim. The trial court relied on a footnote in the court of appeal's earlier opinion on ripeness to conclude that the takings issue had been resolved by the court of appeal and this merits ruling was law of the case. The logic goes like this: if Jamieson had not rejected the Town's settlement offer, he could have developed his property. In short: "you were willing to settle the case, so that proves that the wetlands designation hasn't deprived your property of all economically beneficial uses."

The court of appeal said no, the mention of the offer of settlement in the prior ripeness decision was only to show that the Town's position about uses of the Jamieson property was known "to a reasonable degree of certainty" and the case was therefore ripe, and decidedly did not resolve the merits (and indeed, the inferences the trial court should have drawn from the situation were that the Town was likely to reject the settlement even if Jamieson had accepted it).

The court also reversed the grant of summary judgment to the Town on Jamieson's Penn Central takings claim. These are "ad hoc" factors, and lack any 'set formula" and thus cannot be determined by summary judgment. Factual inquiries require a trial.

The Bad: But the court also rejected Jamieson's argument he is entitled to win his Bert Harris Act claim. Noting first that the claim might be untimely ("it appears that Jamieson may not have been entitled to assert a Bert Harris Act claim to begin with" slip op. at 15 [oof]), the opinion pointed out that the trial court never ruled on this issue. Thus, it remanded the claim, first providing a bit of guidance "[s]hould the trial court find that Jamieson's Bert Harris Act claim is not time-barred[.]" Slip op. at 16.

The short story here is that the Town's wetlands designation was not dispositive either way under the Act's "inordinately burdened" standard. The designation may be a factor, but that must be weighed against other factors (see the list on page 17). No summary judgment here for either party, and "these are issues of fact that must be brought to light in a trial[.]" Slip op. at 17. 

The Ugly: The court doubled down on the unfortunate mislabeling of takings claim that appear from time to time in Florida courts. See for example page 5, where the opinion contrasts "total" or "per se" takings (i.e., categorical Lucas wipeouts), with "partial" or "as-applied" takings (what the court labels ad hoc Penn Central takings). This doesn't appear to be an error of substance, but one of labeling. But as we know, preciseness matters here, in an area of law that is already confusing enough. "Partial" takings are not Penn Central takings, but takings of less than an entire interest in property (an easement, for example). And "as-applied" takings are also not Penn Central takings, but rather the format of a challenge (whether the plaintiff is claiming the government action is facially unconstitutional or only as applied to her property).

Jamieson v. Town of Fort Myers Beach, No. 2D21-2722 (Fla. Dist. Ct. App. Dec. 29, 2022)

CA5: No Jurisdiction Over Federal Takings Claims Against A State

A quick one (2 page, per curiam) from the U.S. Court of Appeals for the Fifth Circuit to send you into the holiday.

In Devillier v. Texas, No. 21-40750 (Nov. 12, 2022), the court summarily concluded that "the Fifth Amendment Takings Clause as applied to the states through the Fourteenth Amendment does not provide a right to action for takings against a state[.]" Slip op. at 1-2.

This is a very short opinion. Here's the entirety of the decision (minus footnotes):

The State of Texas appeals the district court’s decision that Plaintiffs’ federal Taking Clause claims against the State may proceed in federal court. Because we hold that the Fifth Amendment Takings Clause as applied to the states through the Fourteenth Amendment does not provide a right of action for takings claims against a state, we VACATE the district court’s decision for want of jurisdiction and REMAND with instructions to return this case to the state courts. The Supreme Court of Texas recognizes takings claims under the federal and state constitutions, with differing remedies and constraints turning on the character and nature of the taking; nothing in this description of Texas law is intended to replace its role as the sole determinant of Texas state law. As such, this Court lacks jurisdiction to review these claims.

That's it.

The district court concluded otherwise, holding property owners could sue the State of Texas in federal court for inverse condemnation under the U.S. and Texas Constitutions' just compensation clauses. 

Devillier v. State of Texas, No. 21-40750 (5th Cir. Nov. 23, 2022) (per curiam)

Here's The Program For The 40th ALI-CLE Eminent Domain & Land Valuation Litigation Conference, Feb 1-4, 2023, Austin

Here it is, the official agenda and program for the 40th ALI-CLE Eminent Domain & Land Valuation Litigation Conference, February 2-4, 2023 (with a special event the evening of Wednesday, February 1, 2023 to entice you to arrive early).

Here's the brochure with the complete agenda, schedule, and faculty listing. But to tempt you, here are some of the highlights of the program:

• Everything Old is New Again: Why Today’s Practitioners Need to Understand the Original Meaning of the Takings and Just Compensation Clauses

• Private Utility Takeovers – Lessons From a 67 Day Trial

• Valuation Issues When Billboards and Signs are Condemned

• Setting Client Expectations and Identifying Red Flags

• Developing Property Right Issues in Texas - Questions and Answers from the Bench: A View From the Bench (with Texas Supreme Court Justice Jimmy Blacklock)

• Eminent Domain and Regulatory Takings Updates: Important Decisions You Need to Know

• Ethics: Building Your Practice by Mentoring the Next Generation of Eminent Domain Lawyers

• ...and much more!

To register, go here.

Register now and hold your space. In the past several years, we have sold out due to the conference room capacity, and the conference hotel block. So don't delay. 

Looking forward to seeing everyone in Austin for the 40th edition of the Conference.

Program Brochure, 40th ALI-CLE Eminent Domain & Land Valuation Litigation Conference, Austin, Texas, Feb 1-...

Let's Take A Deeper Look At Takings Ripeness, Ninth Circuit

Well, that was quick. As we noted here, we recently argued a case in the Ninth Circuit (October 20, 2022) about whether a regulatory takings claim is ripe. 

Not long after we posted the argument recording, the Ninth Circuit panel issued a short memorandum opinion rejecting our arguments wholesale (November 1, 2022).

So earlier this week, we asked the entire Ninth Circuit to take a look. Here's our en banc petition.

We'll leave it to you to read it and see why we think this one is ripe.

Appellants' Petition for Rehearing En Banc, Ralston v. San Mateo Cnty., No 21-16489 (9th Cir. Nov. 15, 2022...

CA9 Takings Ripeness Oral Arguments: Must Property Owners Secure Govt's Agreement That Property Is Subject To Challenged Regulations Before A Court Can Review?

October 20, 2022 was what one advocate noted was "land use day at the Ninth Circuit," because three out of the four cases being argued in Courtroom 3 of the San Francisco courthouse were indeed land use -- or perhaps more accurately, regulatory takings -- cases.

Ours was one of those cases, Ralston v. San Mateo County.

Without going into too much detail, this is an appeal from the district court's 12(b)(6) dismissal of our regulatory takings complaint. The crux of the claim is that Ralston's R-1 zoned property is subject to an "overlay" district called the Montecito Riparian Corridor, a highly-restricted zone that allows only 5 environmental uses of land within the zone (none of which are consistent with the R-1 zoning). (Ralston's property is labeled "076-19" on the County's MRC map.)

Absent some kind of special dispensation -- what the County calls an "override" -- the County cannot grant a Coastal Development Permit for a residential use in accordance with the R-1 zoning, because CDPs must be consistent with both the Residential zoning, and the MRC overlay.

Following the County's instructions that "[a]ny intention to proceed with an application for development that would run counter to any of those policies must first be throughly [sic] reviewed by the Community Development Director and County Counsel[,]" Ralston did ask the Planning (Community Development) Director. He received what he thought was a pretty definite response: no development in the MRC, and no override.

But the County argued the Planning Director's response wasn't an official denial, and the district court agreed, holding that the case was not ripe under the "final decision" rule of Williamson County, because the County might have granted a waiver of the MRC restrictions and issued a CDP for a residence, if only Ralston had asked the right way by applying for a CDP and then exhausted the County's review process.

In addition to that issue, the focus of yesterday's oral arguments was also on a slightly different issue: the panel questioned the advocates (esp. me!) about whether, to ripen the claim, the County must also have confirmed that indeed, Ralston's property is subject to the above-mentioned MRC restrictions. The complaint alleged it is (see, e.g., the County's map, above). The location of the MRC is determined by how much of a property is covered by certain vegetation, and indeed, Ralston's property is covered, stem-to-stern with arroyo willow, one of the species listed in the County ordinance.

"It is like a finger, pointing a way to the subject property,
back there by the big dead pine tree..."

We argue that alleging this -- which as a factual allegation must be taken as true at this stage -- is enough to ripen the claim, but the County and the Coastal Commission assert that Ralston must have obtained the County's final confirmation that his property is subject to the MRC regulations, before his lawsuit was ripe. In other words, whether this property is indeed at least 50% covered in arroyo willow is not a fact question (for pleading), but rather a scientific and technical legal question that the County must first be given a chance to exercise its discretion about, via some kind of application and official response from the County.

Stream the arguments above, or download the mp3 (big file!) here. And along with us, keep your fingers crossed for a favorable result from the panel.

Stay tuned.

Brigham-Kanner Property Rights Conference Wrap-Up

The William and Mary Law School has posted David Morrill's summary of the recent Brigham-Kanner Property Rights Conference.

In addition to a full day of academic and practicing bar speakers on Friday, and the award banquet on Thursday evening, the Conference included two full days of student-oriented programming earlier in the week, where practicing land use and property rights spoke about their practices, the hot topics in the field, and how they ended up in this practice area. Every session was well attended, as the photos from the events show.

Check it out. And please join us at future Conferences!

Congratulations On Reaching The "Century" Milestone, Eminent Domain Podcast!

That's right: Clint Schumacher's Eminent Domain Podcast has reached its 100th episode. Very impressive, Clint!

And for this "very special episode," Clint was kind enough to ask us to return to celebrate. In a wide-ranging hour-plus chat, Clint and I talked property rights and takings of course, but also hit on several more philosophical subjects. If you could have coffee with any historical figure who would you choose? Pharaoh Khufu? Jack the Ripper? Winston Churchill? What person has influenced your life the most? What's on tap for the 2023 ALI-CLE Eminent Domain and Land Valuation Litigation Conference in Austin? If you had to choose a last meal, what would it be (for me, an easy question)? Clint is a generous host (and person), so I really had a good time.

One note: Clint makes it seem seamless, but I know that the behind-the-scenes process of putting together an episode is a heckuva lot of work, especially if you add it up over 100 episodes and several years, week in and week out. He's too modest to claim kudos, but I am not so reticent: we should all say a big thank you to Clint for putting the podcast out there and keeping us tied together. Please pass on your appreciation! 

We wrapped up by Clint promising me that I could be the guest on his 200th episode. I look forward to it, friend.

Still Time To Join Us (In-Person Or Remote) For The 19th Annual Brigham-Kanner Property Rights Conference

One last reminder that there' still time to register for the upcoming Brigham-Kanner Property Rights Conference at the William and Mary Law School in Williamsburg, Virginia, September 29-30, 2022. If you can't make it to the historic campus, there's an option to attend remotely.

In our opinion, the Conference is the best of its kind because it brings together legal scholars and the practicing bar to talk dirt law theory and practice. We also a have a full supplemental program for law students, that covers property law and careers in eminent domain law, a recruiting session, a program on international property rights, and a program on land use law.

Registration for the Conference is ongoing, and you can sign up here.

Here is the full agenda. (We'll be speaking on Panel #2, "Reshaping the Framework Protecting Property Under the Roberts Court.")

Come on, join us!

 

CA2: Land Use Challenge (Not Takings) Is Ripe - Govt Gave Its Final "No"

Check out the U.S. Court of Appeals for the Second Circuit's opinion in Village Green of Sayville, LLC v. Town of Islip, No. 19-3353 (Aug. 5, 2022), a case in which the court held the Town reached a final decision denying Village Green's request to develop a 64-unit apartment complex on Long Island.

Final decision ripeness under the surviving part of Williamson County, you say? So this is a takings case, right? No, not quite. The claims asserted by the developer  included a takings claim (although it seems to have played a more minor role) and the claims were mostly about the Town allegedly discriminating against affordable housing and the people who build and live in affordable housing. See slip op. at 11.

But as you know, many courts -- including the Second Circuit -- apply Williamson County's final decision ripeness requirements to anything vaguely land usey. Even RLUIPA and ADA claims (yes, ADA claims). Why there needs to be a special ripeness requirement applicable only to "land use" cases, and why the courts cannot simply apply the usual federal court ripeness rules applicable to, you know, every other type of challenge, isn't really clear to us, except that federal courts just don't like to deal with land use cases.

But let's put that aside here, because as the title of this post notes, the Second Circuit actually allowed this land use claim to move forward. Since the ripeness issues turned on what the Town did or didn't do, it's worth a walk-through of what the developer wanted to do, what it asked the Town to do, and how the Town reacted.

As we noted above, the case involved the developer wanting to build affordable housing. It obtained a rezoning of the property from Business to Residence, but the rezone was subject to two conditions, one involving the ability to rent the units and the other about the property's sewer lines. Those conditions became a sticking point, and eventually the developer asked the Town to allow it to develop the 64 units without the conditions. "Local opposition was strong." Slip op. at 6.

Town officials seemed to have reacted to that opposition by doing what they could to avoid saying yes to the proposal, while also avoiding saying no. Eighteen months elapsed, and the Planning Board finally considered approving: "Put to a vote, though, the seven-member Planning Board failed to pass the motion: After the vice chairman recused himself, the vote was 3-3 and deemed a 'non-action.'" Slip op. at 7. The usual pattern ensued - the developer submitted a more modest application with more public goodies included. That did not assuage the opposition. "Members of the public again made hostile comments, discussing 'Section 8' and 'transients,' and pledging that townspeople 'will not forget if this project is approved.'" Slop op. at 7-8.

Four months later, the developer's application was back on the Planning Board's agenda. But no deal, and consideration it was again continued. Two weeks later, the same. This time, the motion to approve the application was at least made. But since no Board member seconded the motion, no vote was held. The Town's lawyer let the developer know that the failed motion to approve was being treated as a denial and that "no further proceedings before the Town Board, Planning Board, or any other Town Agency would be held." Slip op. at 9.

Next stop, U.S. District Court. Despite its lawyer's earlier statement that the application process was done, in court the Town argued otherwise, claiming that it had not been given the opportunity to commit to a position. Slip op. at 24. Having never voted on the application, the Town argued, it can't be said to have made a final decision denying the development, no?

The Second Circuit held no:

The parties seem to agree a no-vote on November 17, 2016, would have ripened the dispute. But because the Town Board declined to give its position this way, we must assess the more unusual route it did take: first, noting in an official resolution that the “motion to approve fails for lack of second,” App’x at 317; then apparently choosing to “treat[] the failed motion to approve as a denial of the application” and promising that no town agency would hear anything further on the matter; App’x at 32-33 ¶ 67; and finally, true to that promise, scheduling no further proceedings on the application in the almost six years since.

We conclude that, through this sequence of events, the Town Board demonstrated its “arriv[al] at a definitive position on the issue that inflict[ed] an actual, concrete injury” on Village Green.

Slip op. at 25-26.

The fact that it took the court 30 pages of opinion, and that it was even a close call, tells you what you need to know about the ruling. Sure, it's the proper result. But at the same time, the case highlights how reluctant courts are to hold the government's feet to the fire not only where the government plainly is trying to avoid making a decision, but as here, where the Town's lawyer actually told the developer "no mas."

It shouldn't be that hard. 

Village Green at Sayville, LLC v. Town of Islip, No. 19-3353 (2d Cir. Aug. 5, 2022)

Links From CRE's "Supreme Court Update: Is This Property's Moment?"

Here are the links to the cases and other materials that we mentioned (and some we didn't) earlier today at the Counselors of Real Estate's program on "Supreme Court Update: Is This Property's Moment?" Thank you to our colleagues at CRE for including us in the program.

I.  The evolving ground rules

• Takings cases can go to federal court:
  • Condemnation: PennEast Pipeline Co. v. New Jersey (eminent domain and the 11th Amendment)
  • Inverse and regulatory: Knick v. Township of Scott (opening back up federal courts to takings claims).
• How you define the “property” taken is key:
  • Murr v. Wisconsin (the larger parcel issue, applied in regulatory takings cases).
  • Koontz (money as property ... and exactions).
  • Brandt (easements, vel non)
• The exclusion “stick” is really important:
  • Any distinction between “permanent” and “temporary” takings is a matter of valuation, not liability: Cedar Point Nursery v. Hassid. 
  • Horne v. USDA (II) (California raisins and physical invasions)
  • Arkansas Game (physical invasions, again).
•  Remedies:
  • The remedy for a “taking” isn’t limited to just compensation: Horne v. USDA (I).
  • Winter v. Natural Resources Defense Council, Inc. (preliminary injunctions, diesel-electric submarines, and Pearl Harbor).

 II.  Issues on the horizon

• Compensation and timing:
  • what to do when the condemnor doesn’t promptly pay up?
  • what is the date of valuation?
• Ability of condemnor to define the taken property:
  • Is there an obligation to value severance damages?
  • Fee take vs easement.
  • Temporary vs permanent.
• Does the Constitution protect property’s use, or value? Police power or takings?
• Whither Yee and the future of the physical occupation rule.
• Are eviction moratoria “takings?”
• Can you really get to federal court and stay there?
• The undivided fee rule ... constitutional?

CA6: State Officials Enjoy 11th Amendment Immunity From Just Compensation Claims In Federal Court

In Skatemore, Inc. v. Whitmer, No. 21-2985 (July 19, 2022), the U.S. Court of Appeals for the Sixth Circuit held that neither the Just Compensation Clause, nor the Fourteenth Amendment abrogated the states' immunity from being sued in federal court for compensation for takings.

This is another one of those cases where -- due to Co-19 -- businesses forced to close or limit operations by the state (here, Michigan) brought regulatory takings claims in federal court. The claims included takings, and the relief sought was just compensation (no prospective injunction or declaratory judgment). The complaint named state officials (in their official capacities) and state agencies as the defendants. The district court dismissed for lack of jurisdiction and for failure to state a claim. 

The Sixth Circuit affirmed. The court rejected the argument that a state's Eleventh Amendment immunity from being haled into a federal court without consent does not apply in takings claims seeking just compensation. It concluded that the Supreme Court in Knick didn't recognize such an exception, distinguishing that case's holding that a property owner has a claim for compensation that may be vindicated in federal court when her property has been taken, because in Knick the defendant was a local government and not the state. Local governments are not covered by the Eleventh Amendment. See slip op. at 8-9.

Next, the court made short work of the argument that the adoption of the Fourteenth Amendment altered the immunity states enjoy from being sued in federal courts. Slip op. at 9. "This argument is meritless." Id. The Fourteenth Amendment only empowers Congress to enforce its provisions with legislation, and "[r]emedies against states under the 14th Amendment are created by legislation, not by other constitutional amendments." Id. [So something like section 1983?] The court also rejected the argument that states consented to federal court jurisdiction by ratifying the Fourteenth Amendment. Slip op. at 10. 

Skatemore, Inc. v. Whitmer, No. 21-2985 (6th Cir. July 19, 2022)

CA1 Splits With CA9: "[T]he Fifth Amendment precludes the impairment or discharge of prepetition claims for just compensation in Title III bankruptcy."

Here's the latest in an issue we've been following for a while. You recall that several years ago, a divided panel of the Ninth Circuit held there's nothing particularly special about an unresolved takings claim for just compensation that sets it apart from other creditor claims in a government bankruptcy.

The Ninth Circuit majority held that owners who assert their property was taken by the debtor-government before the bankruptcy -- but who have not been compensated -- are just unsecured creditors who must "share[] the pain" of the government going broke and sloughing off debt, even if it means that as a result the owner has had its property taken without just compensation. See "Ninth Circuit: Inverse Condemnation Plaintiff Must "Share The Pain" - City Can Shed Obligation To Pay Just Compensation In Bankruptcy, Which Is 'Purely A Monetary Claim'."

Next up, Round 2: In In re Financial Oversight & Management Board for Puerto Rico v. Cooperative de Ahorro y Credito Abraham Rosa, No. 22-1119 (July 18, 2022), the First Circuit went the other way.

Here's the setup. Puerto Rico property owners had claims for just compensation against the Commonwealth. One set of owners was (allegedly) owed compensation for the straight-up eminent domain-ing of their land by quick-take; they claimed the deposits didn't cover the actual amount of compensation. The other group of owners had inverse claims. The court noted that "[f]or purposes of this appeal, all parties agree that the Commonwealth ... took private property from at least some of the takings claimants before petitioning for [bankruptcy]." Slip op. at 18. That agreement would have consequences in the court's later analysis, so remember this point.

The Commonwealth's petition ("perhaps the largest and most consequential public bankruptcy in the nation's history") sought relief for "sovereign debt ... under Title III of the Puerto Rico Oversight, Management, and Economic Stability Act." Slip op. at 8. The Commonwealth's reorganization plan proposed to treat the claims of the property owners as general unsecured debt, payable "at a pro-rata share of the overall recovery for general unsecured creditors." Slip op. at 12. In other words, likely pennies on the dollar, if that. 

The property owners objected: hold on, we have had our property taken without compensation, and our claims are not plain-old unsecured debt because the constitution says we get just (full) compensation. Thus, a claim for compensation can't be wiped out in bankruptcy. Confirming the plan would leave us holding the bag, and thus, the court can't confirm the plan with our claims listed as unsecured debt. 

And guess what? The Title III court agreed, and "directed the Board to modify the plan of adjustment to provide for full payment of any valid eminent domain and inverse condemnation claims if the Board wished to make the plan confirmable." Slip op. at 12-13. The Board did so (while reserving its right to appeal, which it eventually did).

The First Circuit started off by noting that the "appeal raises important questions about the interplay between the power to equitably restructure debts in bankruptcy and the Constitution's requirement that just compensation be paid whenever the government takes private property for public use." Slip op. at 8. Let's get to the holding first:

[O]therwise valid Fifth Amendment takings claims arising prepetition cannot be discharged in Title III bankruptcy proceedings without payment of just compensation.

Slip op. at 9. And by "just" compensation, the court meant whatever full compensation is owed to the owners. How did the court reach this result? Read on.

First, the court rejected the federal government's argument that this isn't a constitutional right vs bankruptcy power issue at all, but that the Article III court's holding was merely it exercising its equitable powers. No, the court concluded, "we read the Title III court's ruling to say precisely what it appears to say: that discharging valid, prepetition takings claims for less than just compensation would violate the Fifth Amendment and render a plan providing for such discharge unconfirmable under PROMESA." Slip op. at 16.

Next, having rejected the feds' invitation to avoid the constitutional question, the court concluded, "we move on to assessing whether the Fifth Amendment precludes the impairment or discharge of prepetition claims for just compensation in Title III bankruptcy. For the following reasons, we conclude that it does." Slip op. at 18. Can bankrupt governments "eliminate their obligation to pay just compensation and instead pay only reduced amounts based on a formula applicable to most creditors[?]" Slip op. at 19. The court held no.

First, "the Supreme Court has been very clear: the bankruptcy laws are subordinate to the Takings Clause." Slip op. at 20. Bankruptcy laws are subject to the Fifth Amendment.

Second, the court rejected the Commonwealth's argument that the Fifth Amendment protects only property held by the owners at the time of the bankruptcy. And because their real property had already been taken by the Commonwealth -- either through expropriation by eminent domain, or inversely taken by seizures -- the only "property" possessed by the owners at the time of the bankruptcy were unsecured claims.

The Commonwealth -- get this -- relied on Knick for that argument. Yes, you read that right. Because the right to compensation "arises at the time of the taking" the theory goes, the claim doesn't arise later when the government denies compensation. And by the time the goverment denies compensation, the owners have already lost their real property: "because the takings at issue here all occurred prepetition, the [Commonwealth] contends, any constitutional violation would have arisen only at the time of the taking." Slip op. at 22. The Commonwealth asserted therefore, that compensation is "untethered from the substantive Takings Clause violation itself." Id. 

The First Circuit rightly held no, that Knick does not "cast doubt on the Fifth Amendment's requirement that just compensation be paid." Id. And here's the critical part:

Recognizing that the "right to full compensation arises at the time of the taking," id., does not imply that the subsequent denial of that compensation does not also raise Fifth Amendment concerns. We decline to read Knick as changing the Fifth Amendment right to receive just compensation into a mere monetary obligation that may be dispensed with by statute.

Id.

The court rejected an argument that the Fifth Amendment protects only rights in specific property, and not unsecured claims for money. Slip op. at 23. That isn't looking at the issue the right way, the court noted. This isn't a question of "whether a bankruptcy law has effected a taking of property" (i.e., whether bankruptcy law wiped out the ability to enforce a contract or other claim), but rather "whether the denial of just compensation for a taking" that "no one disputes" has occurred violates the right to compensation. Slip op. at 24.

Having disposed of that argument, the court next rejected the contention that "nothing about a claim for just compensation makes it any different for bankruptcy purposes than a claim for money damages for any other kind of constitutional violation." Slip op. at 25. Relying on the "language and nature of the Takings Clause," the First Circuit held that "compensation is different in kind from other monetary remedies." Slip op. at 26. The court concluded:

Just compensation then does not serve only as a remedy for a constitutional wrong; it serves also as a structural limitation on the government's very authority to take private property for public use. As the Court has stated, "where the government's activities have already worked a taking . . . , no subsequent action by the government can relieve it of the duty to provide compensation." Id. at 321. Simply put, the Fifth Amendment contemplates a "constitutional obligation to pay just compensation."

Id. (citing First English, 482 U.S. at 315).

Thus, the court concluded, "payment of just compensation [is] unlike most other instances in which the government engages in a constitutional violation and is required to remedy that violation by paying money." Id.

The court expressly rejected the Ninth Circuit's reasoning in the Stockton case. Instead, the First Circuit found "the dissenting opinion of Judge Friedland in that case to be more persuasive." Slip op. at 27. Dissenting in Stockton, Judge Friedland wrote:

The majority instead holds that Cobb has forfeited all property rights in the condemned parcel under California law, and that his pending claim is "simply" a statutory claim for monetary damages. But the statutory character of Cobb’s claim does not diminish its constitutionally protected status—indeed, a constitutional claim for just compensation is a statutory claim for monetary damages under California law.

Here's how the First Circuit wrapped up:

Reduced to its nub, the issue we decide is rather simple. The Fifth Amendment provides that if the government takes private property, it must pay just compensation. Because the prior plan proposed by the Board rejected any obligation by the Commonwealth to pay just compensation, the Title III court properly found that the debtor was prohibited by law from carrying out the plan as proposed.

Slip op. at 30-31.

Naturally, given our view that Stockton was ever-so-wrong, we feel validated by the First Circuit here. So remember that part-and-parcel of the power to take property is the corresponding obligation to, you know, actually pay for it. All of it. And anything that interferes with that right, whether it is, as here, a Congressional bankruptcy statute, a state statute, or anything else must yield to the Just Compensation imperative.

In re Financial Oversight & Mgmt Bd for Puerto Rico v. Cooperative de Ahorro y Credito Abraham Rosa, No. 22...

Here's The Full Speaker And Topic List For The Brigham-Kanner Property Rights Conference (Sep 29-30, 2022)

By now, you know that the 19th Brigham-Kanner Property Rights Conference is set for September 29-30, 2022, at the William and Mary Law School in Williamsburg, Virginia (register here - space is limited - fee ranges from free to $195 - a bargain!). And you know that our colleague Jim Burling is this year's B-K Prize winner.

But now you know who is speaking at the Conference, and the topics: here's the full agenda. The list of speakers is too long to list here but check out these topics:

• Panel 1: The Importance of Property Rights: A Tribute to James S. Burling
• Panel 2: Reshaping the Framework Protecting Property Under the Roberts Court (that's the panel we're speaking on)
  
• Roundtable: Emerging Issues in Takings and Property Rights Litigation
• Panel 3: Choosing A Property Regime
• Panel 4: Property Rights in Times of Scarcity and Crisis

Who can resist these subjects? Plan on joining join us in September.

2022 Brigham-Kanner Property Rights Conference Speaker Panels

You Can Sue Utah For Compensation In State Court, So No Injunction In Federal Court

No smoking in Hatu

A short one from the U.S. District Court in Utah, but worth reading because it highlights one of those unresolved issues: the remedy for a "takings" claim.

Now, you've heard the Supreme Court describe just compensation as the "default" remedy for regulatory takings and inverse claims. But it isn't the only remedy, is it? 

Well, in this Order, the U.S. District Court for the District of Utah seems to think so. At least it is in federal court.

Utah adopted a statute that prohibits tobacco businesses from operating within 1000 feet of a school. Smoke shops sued in federal court for a taking under section 1983 and other things (due process, First Amendment, &c.). The defendant was not the State of Utah because, you know, you can't sue a state for money in federal court unless it consents. So as in other cases, the smoke shops sued state officials (in their official capacity), and limited the relief sought to a prospective injunction, including a TRO.

To get a temporary injunction, the standards are pretty much the same as a permanent injunction, and "[i]t is well settled that interim equitable relief is only available when a plaintiff can obtain at least some final equitable relief." Slip op. at 2. And that was the problem here: according to the court, you can't enjoin a taking "as long as an adequate provisions for obtaining just compensation exists." Id. And "because the federal and nearly all state governments provide just compensation remedies to property owners who have suffered a taking, equitable relief is generally unavailable." Id. (quoting Knick v. Twp. of Scott, 139 S. Ct. 2162, 2176 (2019). 

Utah is one of those states that "provide just compensation remedies." In state courts, only of course. Because the state itself and its officials (in their official capacities) are not "persons" under section 1983. But property owners can sue the state and its officials for compensation for a taking under the Utah Constitution.

Ah, the district court concluded, that means the property owners cannot get the injunctive relief they are asking for in federal court, because they can go to state court and get compensation. Slip op. at 3 ("But Plaintiffs may bring an inverse condemnation action against Utah in state court under Article I, section 22 of the Utah Constitution to recover just compensation for a regulatory taking.").

Whoa, you say that sounds a lot like the now-defunct "state procedures" ripeness requirement from (overruled) Williamson County? Courts elsewhere seem to think that equitable relief against a state is available (see here also) if you can't get compensation in federal court. (Yes, we get that in those cases, the allegation is that the government is wrongfully keeping money belonging to the plaintiffs, but that seems like a thin reed).

Check out this post for more on our thoughts about whether a federal court may grant equitable relief against state officials for takings claims.

Memorandum Decision and Order, Exotic Smoke & Vape v. Cox, No. 2:22-cv-408 (D. Utah June 28, 2020)

New Cert Petition: Copyright Or Takings? (And State 11th Amendment Immunity)

Here's the latest - a cert petition in a case (and an issue) we've been following that asks can a government action that is a violation of copyright also be a taking?

Bynum wrote, researched, and edited a book, a biography of Texas A & M's famed "12th Man" of the football squad. During his research, he met with officials from the university's athletic department and later emailed them a "PDF of the full book," noting that it was not final and only for the recipient's review. 

Next up, trouble: the official (allegedly) "directed his secretary to re-type the Biography and to remove any reference to Bynum of to Epic Sports' copyright information. [The official] rewrote the PDF's byline to [indicate that another author had written the book] and changed the title. And "[o]ver the next 72 hours, the Department disseminated the full Biography to hundreds of thousands of recipients" and posted it on the school's website, Tweeted a link to the book, and quoted from the book.

Bynum was not happy. Eventually, the school removed the book from the website. But not good enough (cat was out of the bag), so Bynum sued in federal court for copyright violations and for a taking. The district court dismissed.

When the Fifth Circuit got the case, it affirmed. Copyright violations are trespasses (torts) and not takings, and Texas is immune from takings suits in federal court.

Here are the Questions Presented:

After this Court’s decision in Allen v. Cooper, 140 S. Ct. 994 (2020), damages remedies for copyright infringements by state governments depend on either showing an actual constitutional violation (as well as a statutory one) under United States v. Georgia, 546 U.S. 151 (2006), or—perhaps—asserting a free-standing takings claim under the Fifth and Fourteenth Amendments. The Fifth Circuit’s categorical rejection of both these avenues in this case raises three questions:

1. Can copyright infringement constitute an actual constitutional violation on a takings theory or, as the Fifth Circuit held, is infringement never a taking?

2. Is a hypothetical state remedy that state courts have never recognized sufficiently “clear and certain,” Nat’l Private Truck Council, Inc. v. Oklahoma Tax Comm’n, 515 U.S. 582, 587 (1995), to prevent an actual due process violation?

3. Does state sovereign immunity bar takings claims altogether, notwithstanding this Court’s holding in Knick v. Township of Scott, 139 S. Ct. 2162 (2019), that the Takings Clause mandates a compensatory remedy in federal court?

Stay tuned. We'll keep watching.

Petition for a Writ of Certiorari, Canada Hockey, L.L.C. v. Texas A & M University Athletic Dep't, No. ____...

CA6: Dammed If You Do - Takings Claim Is Ripe When Govt Decides To Physically Invade And You Don't Need To Wait 'Til It Actually Invades

We've been meaning to post the U.S. Court of Appeals for the Sixth Circuit's opinion in Barber v. Charter Twp of Springfield, No. 20-2298 (Apr. 11, 2022) for a while because it emphasizes an important point about "final decision" ripeness, and the sometimes ridiculous arguments made to support an argument that a takings claim isn't ripe.

In many situations a takings claim is backwards looking, and seeks compensation or some other remedy for something the government has already done. You flooded my property, or your project encroached on my land, or you designated my property for future acquisition and prevented me from using it in the interim are good examples. But not always. Sometimes takings claims are forward looking. Your regulations require me to allow a cable TV company to install a box on my building's roof, or you are threatening to open my private marina to public navigation. Do you have to wait for the bad thing to happen in order to get a court to review your takings claim?

Back to our case. Barber owns land next to Mill Pond Dam, built in 1836 (wow). Apparently, the old dam was not going to hold up forever. After looking at a number of options, the Township and the County decided that removing the dam was the best option. Or at least that's what it looked like they decided. The Township hired engineers and included the removal project in its budget. Its web site noted that "the project has moved to the next phase which included preliminary engineering and conceptual park design." And the local newspaper reported that "Mill Pond Dam to be Removed Next Year."

Barber asserted that removal of the dam would have all sorts of bad impacts on her adjacent land, including flooding of her house. State court inverse and takings claim (§ 1983) followed. "She sought to enjoin the Dam-removal project, alleging that it would constitute a taking under the federal and Michigan constitutions and a trespass under Michigan law." Slip op. at 3.

The Township and the County removed the case to federal court, and followed with a motion to dismiss on the usual grounds - takings case filed too early (ripeness) and lack of standing. The district court agreed, and dismissed the complaint. 

The Sixth Circuit rejected the Township's argument that it had not made the final decision to remove the dam. "Ordinarily" a claim that the government is physically invading property is ripe when the government invades. But that rule only applies when the remedy sought is backwards-looking (compensation), not when the owner seeks injunctive relief. An "impending physical taking could warrant injunctive relief." Slip op. at 7.

In Cedar Point Nursery, the plaintiffs sought to enjoin a local regulation that allowed union representatives to enter private property and speak to agricultural workers. Id. at 2070. The Court, treating the claim as a per se physical taking, allowed the plaintiffs to proceed with their motion for a preliminary injunction even though union representatives had never set foot on one plaintiff’s property. See id. Thus, the plaintiffs could bring suit even without experiencing a physical intrusion because the regulation allowed future physical intrusions. See id. at 2070, 2072–73. Accordingly, a claim for injunctive relief is ripe if the government has reached a final decision that will enable a future physical taking.

Id. The decision to remove the dam gave rise to two takings claim: a regulatory taking (the decision to remove), and the "inevitable demolition" that will amount to a physical taking. So if the Township reached a final decision to remove, both claims are ripe. 

The court concluded that the Township did so. That newspaper article noted the removal project is "scheduled to begin in 2022." At oral arguments, the Township's lawyer acknowledged that "the choice has been made" to remove the dam. But that doesn't mean the taking is ripe, the Township responded, adjudication must wait until the dam is actually removed. The court rejected the idea that a property owner has to wait for the Sword of Damocles to fall before trying to, you know, prevent it:

Having conceded this point, Defendants are left with one argument; until the Dam is actually removed, there is no way to know whether Barber has a viable takings claim. But this cannot be the case in the wake of Cedar Point Nursery. As the Supreme Court made clear, plaintiffs may sue for injunctive relief even before a physical taking has happened. Cedar Point Nursery, 141 S. Ct. at 2070, 2072–73.4 Barber’s claims are therefore ripe.

Slip op. at 8.

Next, the court concluded that Barber had standing because the Township's actions threatened her with injury. If the Township had not made the decision to remove yet, the injury might be too speculative. The court looked at the same facts as its ripeness analysis focusing on the Township's admission that it "planned to remove the Dam in the near future." Slip op. at 11.

One judge dissented, concluding that yes, the Township was thinking of removing the dam, but had really not actually decided to do so because "they had yet to draft - much less approve - blueprints for the project." Dissent at 14. Nor had the Township had not rounded up the money to do so. This was a municipal "hope" to remove, not an actual decision to do so:

Applying an ounce of “experience and common sense” reveals that Barber had little idea how the project, should it come to fruition, would affect her property. Iqbal, 556 U.S. at 679. Instead, her fears rested on “mere speculation and assumptions,” a far cry from the “certainly impending” injury necessary to establish standing where harm has yet to occur. Kanuszewski v. Mich. Dep’t of Health & Hum. Servs., 927 F.3d 396, 410 (6th Cir. 2019) (cleaned up) (quoting Clapper v. Amnesty Int’l USA, 568 U.S. 398, 409, 411 (2013)).

Dissent at 15. This was nothing "more than an abstract policy disagreement about the dam’s future." Dissent at 17.

Barber v. Charter Twp of Springfield, No. 20-2298 (6th Cir. Apr. 11, 2022)

Lawprof Saxer On Jotwell: "The Impact of Knick on Regulatory Takings and Those Pesky Lucas Exceptions"

Check this out: Pepperdine lawprof Shelley Saxer has a piece in Jotwell, "The Impact of Knick on Regulatory Takings and Those Pesky Lucas Exceptions," a review of U. Hawaii lawprof David Callies' book, "Regulatory Takings After Knick."

The review is short and to the point, so we suggest you read it. But here's a teaser:

This small but mighty book offers a concise history and understanding of takings jurisprudence as it stood before and after the Knick decision. It brings clarity to a convoluted chronicle of takings litigation and presents specific situations where litigants have asserted a total taking claim and the defense has relied on the various exceptions to Lucas.

Don't miss it.

Links From Last Week's Georgia Bar Association Eminent Domain Conference

Here are the links to the cases and other materials that we talked about last Friday at the Georgia Bar Association's annual Eminent Domain Conference. Our talk was entitled "It's the Chief Justice's Property World, We Just Live In It: National Trends in Takings, Property, & Eminent Domain," and was part of the Eminent Domain Section's (yes, the Georgia Bar has a Section entirely devoted to eminent domain!) annual conference on the topic. I was honored to have been asked to chat with this august and expert group of lawyers.

• Knick (opening back up federal courts to takings claims).
• Penn East (eminent domain and the 11th Amendment)
• Horne II (California raisins and physical invasions)
• Murr (the larger parcel issue, applied in regulatory takings cases).
• Winter (preliminary injunctions, diesel-electric submarines, and Pearl Harbor).
• The per curiam CDC eviction moratorium opinion.
• Koontz (money as property ... and exactions).
• Arkansas Game (physical invasions, again).
• Horne I (compensation isn't the only remedy for "takings").
• Brandt (easements, vel non)
• Help me help you!
• What to do when the condemnor doesn't promptly pay up.
• Abstention as the new Williamson County?
• The undivided fee rule ... constitutional?
• Whither Yee and the future of the physical occupation rule.

I look forward to future collaborations with our Georgia colleagues!

New Article: Woolhandler & Mahoney, Federal Courts and Takings Litigation, 97 Notre Dame L. Rev. 679 (2022)

A new article on takings from U. Virginia Law School profs Ann Woolhandler and Julia Mahoney in the Notre Dame Law Review, "Federal Courts and Takings Litigation." Get the pdf here.

Rather than try and summarize the piece, we're just going to cut-and-paste the highlights from the article's Introduction:

While Knick clearly expands the lower federal court role in takings claims, many questions remain. We do not know how federal courts will respond to the increase in claims—whether they will embrace a robust federal role in land use cases, or use various abstention doctrines to rein them in. While pro-regulatory and pro-property rights scholars have predictably taken sharply contrasting positions as to the appropriate federal court role post-Knick, this Article will recommend a middle-of-the-road approach, based partly on history and partly on an assessment of where the lower federal courts may most usefully contribute to the fair determination of takings claims.

...

Going forward after Knick’s overturning Williamson County, we ask: What role should the federal courts play? The demise of Williamson suggests that the federal courts may significantly increase their role in land use decisions, but it may also suggest that they will more actively use abstention doctrines to reduce Knick’s impact. We evaluate the use of Pullman and Burford abstention doctrines in takings claims, and find them inapt. We suggest an abstention doctrine specially for takings cases that would sort out cases where the federal courts are most likely to contribute to fair applications of the law. Finally, we suggest that constitutionally-based actions brought under § 1331 may be better homes for takings cases than § 1983 actions.

...

[The Article] outlines categories of claims for which lower federal court jurisdiction may be more and less warranted. Finally, it suggests that constitutional claims under the federal question statute rather than § 1983 may be a better vehicle for federal courts takings claims, Knick notwithstanding.

(footnotes omitted).

Highly recommended. [Disclosure: as noted in footnote ** of the piece, we offered our thoughts to the authors on a draft of the article.]

CA8: Ordinance Making It Really Really Hard To Reject Tenants Isn't A Physical Taking

Check out the U.S. Court of Appeals for the Eighth Circuit's opinion in 301, 712, 2103 and 3141 LLC v. City of Minneapolis, No. 20-3493 (Mar. 14, 2022), in which the court held that a Minneapolis ordinance prohibiting property owners from rejecting a prospective tenant because of the applicant's criminal, credit, or rental history isn't a taking.

The challenged ordinance "requires landlords to evaluate applicants for rental housing by either (1) 'inclusive screening criteria' or (2) 'individualized assessment.'" Slip op. at 2. That's a roundabout way of saying that a property owner cannot reject an applicant for their criminal or credit background, unless the owner first considers other "supplemental evidence" to justify why the applicant should become a tenant in spite of these problems, and notifies the tenant why this evidence isn't enough to outweigh the problems. 

The court first rejected the owners' claim that the ordinance allows third parties whom the owners don't want in their properties to physically occupy their spaces. Relying on Yee, the court concluded that the ordinance doesn't require owners to allow people to occupy their property whom the owner doesn't want there. Wait, you say, doesn't the ordinance prohibit the owner from making that call? Well, not quite according to the Eighth Circuit: yes, the owner cannot use the applicant's sketchy credentials alone as a reason to deny a tenancy, but may still deny an applicant if, after reviewing the "supplemental [mitigating] evidence" submitted by the applicant, the owner still thinks s/he doesn't want the person as their tenant. Thus, the court concluded, this isn't some kind of compelled occupation:

True, an ordinance that would require landlords to rent to individuals they would otherwise reject might be a physical-invasion taking. Regardless, the Ordinance here has an “individualized assessment” option that allows landlords to reject individuals due to undesirable criminal, credit, rental, and other history so long as they comply with the Ordinance’s procedural requirements (including considering supplemental evidence and providing a written explanation of rejection). Due to the individualized assessment option, the Ordinance is a restriction on the landlords’ ability to use their property, not a physical-invasion taking.

Slip op. at 7.

Come on, man, argued the landlords, that "individualized assessment" option isn't really an option at all, because it is really difficult, time-consuming, and expensive to go through that process. The court considered that option under Penn Central, concluding that there was no taking because the property owners didn't introduce sufficient evidence to support any of the three factors. Slip op. at 9 ("None of the Penn Central factors support a taking in this case.").

And finally, the court also rejected a substantive due process claim, concluding that that the owners here do not have a fundamental property right. Say what? Didn't the owners assert a right to exclude, and didn't Cedar Point say that was about as fundamental a property right as you can assert? Here, the Eighth Circuit reached back to its takings analysis, and concluded that the ordinance here does not infringe any right to exclude, it merely adds layers of process that a property owner must work through before s/he excludes:

This court need not address whether the right to exclude is a fundamental right under substantive due process. As discussed, the Ordinance does not infringe any right to exclude others from entering and using landlords’ property. Rather, it requires them to follow tenant-screening procedures before excluding others, including considering supplemental materials and later providing a written explanation.

Slip op. at 10. And here, it isn't really a plain-old right to exclude that is the "property." Rather, the court defined the property as "the right to exclude others from property without following tenant-screening procedures like considering supplemental materials and providing a written explanation." Slip op. at 10 (emphasis added). Having narrowly defined the property right as the right to be free of regulation, the court concluded, "[t]he landlords have not shown that such a right is 'objectively, deeply rooted in this Nation's history and tradition.'" Slip op. at 10 (citations omitted).

That very nearly seems like a sleight-of-law to us, because if you always define the property right being asserted as the right to be free of the challenged regulation, well, you are almost never going to find that the right is "deeply-rooted" and "traditional."

Having defined the right narrowly and thus not fundamental, the court applied rational basis review. Do we need to tell you what that meant here for the due process claim?

301, 712, 2103 and 3141 LLC v. City of Minneapolis, No. 20-3493 (8th Cir. Mar. 14, 2022)

CA4: Just Comp Isn't The Only Remedy For A Taking

Here's a really short one from the U.S. Court of Appeals for the Fourth Circuit. Not published, so even shorter than you might expect.

In Virginia Hospital & Healthcare Ass'n v. Kimsey, No. 20-2176 (Mar. 1, 2022), the court rejected the Commonwealth's argument that the sole remedy for a takings claim is just compensation.

The plaintiff challenged a statute which limited their ability to obtain reimbursement for medical services rendered to Medicaid patients, which instead keys reimbursement to the patients' diagnoses. According to the plaintiffs, this scheme leaves them holding the financial bag in situations were they render services that the statute deems avoidable because of the final diagnosis. 

The complaint alleges a regulatory taking, because the statute "denies just compensation for federally-mandated emergency services by predicating reimbursements on the final diagnosis only - and not on the services actually provided," and for reimbursing at only 1/2 the usual rate for those patients readmitted to the hospital. Slip op. at 8.

The district court dismissed, agreeing with the Commonwealth's argument that the sole remedy for a taking is just compensation, and the relief sought here - prospective injunctive relief (the way to plead around 11th Amendment limitations on damage remedies) cannot be granted. The court concluded, "[a]s long as an adequate provision for obtaining just compensation exists, there is no basis to enjoin the government's action effecting a taking." Slip op. at 10. Because they may bring an action to recover compensation, they are "foreclosed from seeking injunctive relief." Id. The court dismissed for lack of standing.

The Fourth Circuit reversed. After first acknowledging that in Knick, the Supreme Court noted that, "[s]o long as the property owner has some way to obtain compensation after the fact, governments need not fear that courts will enjoin their activities[,]" the Fourth Circuit held that the plaintiffs here are arguing that they're asking to enjoin the Commonwealth from denying compensation. That, the court concluded, is a different matter because they are not seeking to enjoin "the taking itself." Slip op. at 13.

"We're not trying to force you to pay us damages for changing the reimbursement rules, we're trying to stop you from withholding money that you should be paying us" is how the argument goes. That's a fine distinction, for sure. But one which the Ninth Circuit approved a short time ago, for example.

Here, the Commonwealth has a duty to pay the full amount (as required, the plaintiffs allege, by federal law), and the Commonwealth isn't living up to that obligation. Thus, the injunction isn't really seeking to enjoin the taking, just enjoin the failure to provide compensation. Ah, got it.

The Fourth Circuit also noted that the district court had not actually identified any alternative cause of action (the district court probably meant that the plaintiff could have sought just comp via a Virginia-law inverse condemnation lawsuit in state or federal court, but didn't actually say so).

Vacated and remanded.

Virginia Hospital & Healthcare Ass'n v. Kimsey, No. 20-2176 (4th Cir. Mar. 1, 2022) (unpub.)

2022 ALI-CLE Eminent Domain And Land Valuation Litigation Conference, Scottsdale: You Should Have Been There!

After a two-year absence in which we went remote, in the last week of last month (our usual spot on the calendar, between the playoffs and Super Bowl), we once again met in-person for the American Law Institute-CLE Eminent Domain and Land Valuation Litigation Conference.

Approximately 200 lawyers, judges, legal scholars, appraisers, law students, right-of-way agents, relocation experts, property owners, and other related professionals gathered in-person--yes, in-person--at the Scottsdale (Arizona) Resort at McCormick Ranch, to get reacquainted, learn stuff, and renew ties last made in-person in Nashville in 2020. In addition to the live attendance, we also welcomed about 50 remote colleagues, who joined the live webstream.

This was the 39th edition of the Conference, one of the most-established and successful conferences in the ALI-CLE stable of programs.

To those who joined us - thank you. This conference reminded us of why this program is so successful, and why we all return year-after-year.

To those of you who didn't (or couldn't) join us, here's what you missed. You need to remedy that, and come join us next year...

Our 2022 Proof of Life Photo.

Every year, as we open the program, I take to the lectern for what I call my "proof of life" photo. Our Conference ends up in some really fun, exciting places. Nashville. Palm Springs. San Diego. Austin. San Francisco. Charleston. And I want to prove to the folks back in the office that yes, we really are in the room, learning stuff. And not out enjoying all that our venues have to offer (we save that for after-hours).

In this photo, we're in the room, spread out (the Resort put us in its massive ballroom, so we had room to spare).

Thank you to our sponsors. Without your generosity, the Conference would not be as good as it is.

Lawprof Karen Bradshaw presented our keynote address on Friday, "Do Animals Have Property Rights?" with more from her recent book "Wildlife as Property Owners." Her talk was followed by a book signing, too. Interesting stuff for sure.

Our main room was nicely filled for every program. A real testament to the subjects discussed, and the quality of the faculty.

The program includes a mix of practice and substantive topics. Here, Virginia's Steve Clarke in one of the breakout rooms (also nicely filled), presenting on "Federal Court and the Daubert Challenge – How To Prepare."

But it wasn't all eminent domain, property, and CLE credits. Naturally, with the beautiful Arizona winter weather, we found time to get out-of-doors and do things. Like this intra-firm golf tournament.

Which firm prevailed? You'll have to ask them who has the bragging rights.

What was especially nice was that our sponsor tables and the ALI-CLE registration table could be outside of the presentation rooms. Love that AZ weather.

New Jersey's Tony Della Pelle and Connecticut's Dwight Merriam on "COVID-19 Takings."

Our faculty includes not only lawyers and law professors. We also have other industry professionals come and present. Here, Washington's Martyn Daniel, Texas' Kristen Bennett, and (lawyer) Alan Ackerman from Michigan speaking about "Maximizing Relocation Benefits: Understanding the Law and Regulations to Ensure Fairness."

Ah, ethics. A tough subject to cover. Especially at 8am. But Georgia's Ivy Cadle (with the obligatory "go dawgs!"), Michigan's Darius Dynkowski, and (off-screen) Virginia's Kelly Sheeran and Texas' Justin Hodge filled the room with "Ethics Jeopardy! Live."

Yeah, Justin really did go for the end zone for his role as Ethics Jeopardy! host.

We understood the situation. Our faculty, staff, and attendees came to Arizona from around the nation. Some places have opened up, others are still getting there. We minimized any risks. Spread out in a huge room, and everyone was pretty cool with the modest requirements from ALI-CLE. What was especially good was that nearly every event but the actual programming were outside. 

Another featured panel was on the Supreme Court's big decision in Cedar Point Nursery. We brought together three expert perspectives on the case and what it means for the future. "Did the Supreme Court Signal a New Direction for Property Rights in Cedar Point Nursery?" featured California's Joshua Thompson (prevailing counsel in the case), U. Virginia lawprof Julia Mahoney, and (off-camera, since he remoted in) Maryland's Matthew Littleton, who filed a government-side amicus brief in the case.

Also pictured: the moderator, some guy who writes a blog.

Colorado's Katie Gray and Nebraska's Bill Blake on "Project Abandonment: How to Position Your Client for the Fallout When Projects Don't Get Built." Really useful.

Tag swag (aka badge flair) courtesy of our Platinum sponsor.

Our two fave tags.

Outdoors at night - really nice under the lights by the fire, after a long day of CLE programming.

Hawaii's Mark Murakami teamed with Wisconsin's Smitha Chintamaneni for "Why Jurisdictional Offers Must Include an Assessment of Severance Damages."

Even our final programs each day attracted a substantial crowd, often tough to do after long days of sitting in class. A testament to the strength of the faculty and the topics. Here's the audience for "Defending the Appraisal in the Courtroom - The Insider's View."

We put speakers with competing views on these panels, to get the blood pumping and keep everyone's attention.

Saturday morning, after two full days of (great) programming, is still a tough spot for a speaker, because they have to keep us focused, and interested.

That's why we always reserve these spots for two old hands, who will keep us zeroed in. Above is California's Jim Burling, with a tour-de-force solo hour on "What Are the Top 20 Ways to Increase the Cost of Housing? The Answer May Surprise You!"

Below, Michael Berger (looking a bit like Big Brother, admittedly), who remoted in from California with his annual "Regulatory Takings Update."

Feral cats and property rights had us smiling (ask Michael about what this refers to).

Michael Berger is Watching You.

A group photo of the William and Mary Law School contingent at the Conference (minus two other WM Law colleagues who could not be there for the photo). Recent and long-time alumni, current law students, a law prof, and (fourth from left) Jim Burling who later this year will be awarded WM Law's Brigham-Kanner Property Rights Prize at the B-K Conference in September 2022.

A pretty good showing for the alma mater.

There was a whole lot of podcasting going on. Thanks, Infrastructure Junkies and Eminent Domain Podcast. Can't wait for the episodes you recorded.

Again, thank you sponsors!

What about next year? Usually, on the last day of a Conference, we announce the dates and the venue for the following year. This year, due to some slowdowns, ALI-CLE couldn't quite get all the requirements in place to make a formal, official announcement. As soon as we know the venue, we'll go loud here.

As for the date: same date as usual - last week of January or first week of February, depending on the football schedule (which we're trying to avoid).

Stay tuned.

 

The Circle Is Now Complete: A Sampling Of Final Paper Topics From William and Mary Law's Eminent Domain & Property Rights, And Land Use Courses

If you ever get the opportunity to teach in a law school -- either as a full-time legal scholar, or part-time as an expert adjunct practitioner -- take it if you can. You might think you know a lot about a particular subject, but there's nothing like spending time at the lectern in a law classroom in front of sharp and eager lawyers-in-training to sharpen your thoughts, and get you to truly understand a subject.

And folks calling you "professor" can evoke a smile.

But if there's one downside to the law school experience from the teacher's side of the lectern, it's grading. Especially at a law school like William and Mary that has a pretty strict mandatory curve. In upper-division courses that we handle like Eminent Domain and Property Rights Law and Land Use -- where we're dealing with some very high-level stuff and the quality of the students is uniformly high -- that makes for some hard choices at this time of year. Despite these challenges, we've wrapped up grading for the Fall 2021 Semester, and have submitted the official scores.

Although I cannot share with you the students' final papers in these classes, I don't think they would mind if I give you a sampling of the topics and titles, just so you can see how the next generation of lawyers is thinking about property, property rights, takings, land use, and environmental law (inter alia). 

Check out these titles:

• The Many Saints of Land Use Law
• The Past, Present, and Future of Richmond Affordable Housing
• What's on the Menu? - The Future of Outdoor Dining and the Tension Between Land Use and Public Health
• Could Monetary Compensation Fully Indemnify Property Owners for Idiosyncratic Values in Takings Cases?
• The Lingering Effects of the Dawes Act on Tribal Land Use
• The Dawn of Debt and Everything Else: An Examination of the Works of Michael Graeber and the Role of Eminent Domain and Property Rights
• Inflation for Land Use Control
• Agritourism in Wine Country: Analysis of Accessory Uses in Napa Valley
• Judicial Exaction of Euclidean Deference Under Koontz
• A Review of Richard Rothstein’s The Color of Law: A Forgotten History of How Our Government Segregated America
• What’s on the Inside Counts: Why Historical Preservation Regulations Should be Allowed to Regulate Interior Landmarks and the Issue of Public Access
• Through the Buchanan Lens: Reframing Virginia Land Use Laws
• The Case for Equal Application of RLUIPA’s Equal Terms Provision
• The Government Giveth, and the Government Taketh Away: Retroactive Application of Inter Partes Review Under the Takings Clause
• The Right to Share: Is Virginia Beach’s Regulation of Short Term Rentals a Taking under the Takings Clause of the Fifth Amendment?
• The laws of nature do not recognize property rights, complicating the Commonwealth of Virginia’s adaptation to climate change
• Looking at Viniculture Through the Glass of Historic Preservation Law, or
  A Brief Wine Advocate
• Is the New York State Canal Corporation the Onceler of Upstate New York?: An Analysis of Town of Pittsford v. Power Authority of New York
• Law and Ownership as Evolving Stories: A Review of Mine!
• Incentive Zoning in New York
• The Tide is High but Norfolk's Holding on: An Analysis of Norfolk's Climate Change Adaptation Strategies and a Review of the Potential Claims in Response
• Flipping the Play: How Localities Can Use the Power of Eminent Domain to Seize Sports Franchises and Finally Stick it to Bob Irsay
• Land Use Control – Is it Important to the Average Joe?
• Re-Evaluating Bennis and Civil Forfeitures Under the Takings Clause
• The Guardian of Every Other Right - A Constitutional History of Property Rights and a Discussion on Tariffs, Redistributionism, and Capitalist Liberty
• Pipelines and Eminent Domain: A Constitutional and Environmental Analysis of Energy Takings
• Paradise Stolen: An Ethical Reexamination of Property Deprivation and the Plight of the Atakapa-Ishak Peoples of Louisiana’s Grand Bayou Indian Village
• A Flood of Pollutants: The Promises and Perils of a Regulatory-Takings Approach to the Right to a Clean Environment

And this is only a sampling.

I don't know about you, but I feel pretty good about this. I will be encouraging several of them to consider beefing up their papers and submitting them for publication.

When City Busts A Redevelopment Deal, It Might Face The Wheel (But Not For A Taking)

A developer alleged that the city didn't live up to its contractual obligations.

The city thought it would be a good place for a new headquarters for something called "Perfect Game Incorporated." The usual plans ensued, including agreements between the city, a non-profit redevelopment facilitator, and Preston Hollow, a "finance company that funds economic development projects for municipal governments and development corporations." These agreements dealt with loans by Preston to the city and the facilitator; the loans were used by the facilitator to purchase two parcels in the city for the project, with some of the money remaining in escrow subject to disbursement when certain things happened.

That's when things allegedly went awry. As the Fifth Circuit put it, "trouble ensued." Preston claimed that the facilitator insisted on disbursement, even tough it has not yet complied with the conditions. Preston sent a notice of default, and requested that the escrow company return the funds. Denials by the city and the facilitator, and back-and-forth claims and denials. Next up, federal court 1983 lawsuit. 

For a taking.

The district court dismissed for failure to state a claim. In Preston Hollow Capital, LLC v. Cottonwood Dev. Corp., No. 21-50389 (Jan. 14, 2022), the U.S. Court of Appeals for the Fifth Circuit agreed with the district court and affirmed the dismissal. Even if everything the complaint alleged was true, that does not equal a taking. The city and the facilitator were acting in their "contractual or proprietary capacity," and "[w]e decline this invitation to constitutionalize what amounts to nothing more than a contract dispute." Slip op. at 1.

The court rejected the plaintiff's main argument, that Knick changed the substantive ground rules and rejected the notion that section 1983 does not mean that all state law tort or contract actions are takings. Slip op. at 5. No, the Fifth Circuit concluded, "Knick concerns when a takings claim becomes ripe as a procedural matter -- not what constitutes a 'taking' as a substantive matter." Slip op. at 5.

Preston countered by pointing out that its contractual rights are property, and that such property is protected from uncompensated takings. Here, it argued, the money it disbursed is property (correct there), and that this property was taken when the city and the facilitator kept it. Ah, the Fifth Circuit responded, there's the rub: by what authority did the city get it, and by what authority was it allegedly (wrongfully) keeping it? That's right, the contract. "But Preston Hollow exchanged that 'pre-existing title' for various rights laid out in the Loan Agreement[,] ... so Preston Hollow cannot seriously claim that 'the right at issue is not governed by the terms of the parties' contract.'" Slip op, at 6 (citation omitted).

But we kind of guessed why the takings path was chosen here - no viable claim against the city for breach of contract under state law. Tough cookies, the Fifth Circuit concluded. Sovereign capacity is sovereign capacity, and here, when it allegedly wrongfully broke the deal with Preston, the city was employing the same authority that ever other contractual dealbreaker employs -- its private capacity power, not its governmental power:

But even if it were true that there were no contractual or other claims under state law that Preston Hollow might have pursued against Defendants—an issue on which we of course express no position here—that does not change the fact that a government must be acting in its sovereign capacity to effect a taking.

Slip op. at 6.

Preston Hollow Capital, LLC v. Cottonwood Dev. Corp., No. 21-50389 (5th Cir. Jan. 14, 2022)

Links And Materials From Today's Land Use Institute Takings/Eminent Domain Session

LUI Co-Chair Prof. Frank Schnidman introducing the faculty

Here are the links to the cases and issues that we just finished speaking about at the 35th Annual Land Use Institute (more information on the LUI here). Today was day 1 of a multi-day remote program and the sessions are available ala carte, so there's still time to join in and learn.

Supreme Court

• Cedar Point Nursery: the Supreme Court affirms the "keep out" vibe in property law. Yes, there are three "exceptions" to the presumption that any physical intrusion into property is a taking (torts, entries allowed under "background principles," and legal exactions), but overall a very strong affirmation of property rights.
• Pakdel v. San Francisco: the "final decision" ripeness requirement in takings cases is "relatively modest" and turns on "de facto" readiness. Yes, it's a technical requirement, but let's not get too technical about it.
• PennEast Pipeline Co., LLC v. New Jersey: federal eminent domain -- even when delegated to a private actor under the Natural Gas Act, trumps a state's 11th Amendment immunity. Bottom line for us: the Court did not mess up eminent domain law.
• Alabama Ass'n of Realtors v. Dep't of Health and Human Svcs.: in striking down the CDC's eviction moratorium, the Court leaves a few tantalizing takings clues.
• Eychaner v. City of Chicago: the Supreme Court comes this close to deciding whether to overrule Kelo.

Regulatory Takings/Inverse Condemnation

• Andrews v. Mentor: the Sixth Circuit distinguishes between due process property and takings clause property.
• Alliance for Responsible Planning v. Taylor: a California appeals court concludes that a requirement that a developer pay "for all necessary road capacity improvements" is too broad and violates Nollan/Dolan.
• F.P. Dev., LLC v. Twp. of Canton: the Sixth Circuit rules that a "tree preservation" ordinance imposes an exaction in violation of Dolan's proportionality requirement.
• South Grande View Dev. Co. v. City of Alabaster: the Eleventh Circuit affirms a Penn Central jury verdict for a rezoning that resulted in an 86% loss of value.
• Yawn v. Dorchester County: the Fourth Circuit rejects a trial court ruling that dismissed a takings claim because the government action was a valid exercise of its emergency police power.
• Ray v. City of Rock Hill: the South Carolina Supreme Court concludes that a city reconnecting a stormwater pipe that previously flooded (that causes more flooding" is the "affirmative, positive, aggressive act" required to trigger inverse condemnation.
• Michael M. Berger, "Whither Regulatory Takings," 51 Urb. Law. 171 (2021): a must-read.

Eminent Domain - Just Compensation

• City of West Chicago v. Pietrobon (unpublished): a taking for a public road violates the public use/necessity requirement for two reasons: (1) the question is factual and not legal, and (2) the city had not shown the taking was part of a larger comprehensive plan.
• Christus Lutheran Church of Appleton v. Wis. Dep't of Transportation: the Wisconsin Supreme Court concludes that the DOT met its obligation to base its offer of just compensation on a "full narrative appraisal" even though the appraisal relied on did not detail the amounts it offered. It is enough that an appraisal (even an appraisal that concludes no damages) is a "fundamental ingredient" of the jurisdictional offer.
• Elpa Builders, Inc. v. State of New York: if the final compensation awarded is less than the deposit and the owner has withdrawn the deposit, the owner is liable for the difference, plus interest. Withdraw at your own risk, owners.
• Bayou Bridge Pipeline, LLC v. 38.00 Acres, More or Less: the Louisiana Supreme Court concludes that attorneys fees are required as part of the requirement to compensate owners for "the full extent of their loss."
• Two law journal articles on just compensation: Thomas Merrill, The Compensation Constraint and the Scope of the Takings Clause, 96 Notre Dame L. Rev. 1421 (2021), and Richard Epstein, Valuation Blunders in the Law of Eminent Domain, 96 Notre Dame L. Rev. 1441 (2021).

Thanks to all for joining us.

New Cert Petition: The Self-Executing Fifth Amendment Abrogates 11th Amendment Immunity

Here's the latest in a case we've been following (one in which we guessed from the beginning was headed where it is today).

The Zitos claim that their property was taken without compensation. They sued for compensation in federal court. Knick tells us that this is okay, right? Well, the problem for the Zitos is that they claim the State of North Carolina did the taking. And you know what that means: 11th Amendment "immunity." You can't sue a State for money in federal court without its consent. And North Carolina didn't consent.

The District Court dismissed. It concluded that it might have allowed the takings claim for compensation to proceed in federal court except that the Fourth Circuit already concluded that a federal court is barred from considering a takings claim against a state if state law recognizes a takings claim. See Hutto v. South Carolina Retirement System, 773 F.3d 536, 552 (4th Cir. 20914) ("'the Eleventh Amendment bars Fifth Amendment taking claims against States in federal court where the State's courts remain open to adjudicate such claims.").

Wait...you can't come to federal court with a takings claim if there are available state procedures for obtaining just compensation? Sounds familiar, no? Not to the Fourth Circuit, which affirmed. Read this detailed analysis of the Fourth Circuit's opinion here: "4th Circuit: State Sovereign Immunity Bars a Takings Claim in Federal Court when Remedies are Still Available in State Court." 

The court held that Knick's throwing back open the federal court door to takings claims did not address or otherwise undermine the usual 11th Amendment rule. Nor does the "self-executing nature" of the 5th Amendment's Just Compensation requirement alter that. See Zito, slip op. at 11 ("So Knick did nothing new with respect to the self-executing nature of the Takings Clause in federal court.") (footnote omitted). Yes, Knick made Fifth Amendment private property rights equal with other rights (under Williamson County, these rights were definitely treated as second-class right), but it didn't elevate private property rights and merely subjected them to the same 11th Amendment limitations on other constitutional rights. There's an exception to the usual 11th Amendment immunity states enjoy in federal court if there isn't a "reasonable, certain, and adequate" means to obtain compensation in state court. But such remedies exist, the Fourth Circuit concluded.

So now we have the cert petition, which asserts this Question Presented:

Whether the Fourteenth Amendment’s incorporation of the “self-executing” Just Compensation Clause abrogates state sovereign immunity from federal takings claims?

Disclosure: the Zitos are represented by our law firm, Pacific Legal Foundation. So we're not going to say much more about this, except to note the Summary of Argument:

The Eleventh Amendment and the Fifth Amendment’s Just Compensation Clause express two of the most venerable constitutional principles in existence: sovereign immunity for states and just compensation for citizens whose property is taken for public use. These principles function independently and adequately in most cases. However, when a state takes property without compensation, sovereign immunity and the Just Compensation Clause—applicable to states through the Fourteenth Amendment—come into conflict. While the former bars a damages award, the latter positively requires it.

The Fourth Circuit’s holding that sovereign immunity is superior to the right of compensation for a taking conflicts with this Court’s jurisprudence, diminishes the Just Compensation Clause, and conflicts with the decisions of other courts, all of which justifies review.

Pet. at 12-13.

Check it out, and stay tuned.

Watch: "The Future of Regulatory Takings at the Supreme Court"

In case you missed it live, here's the recording of the recent one-hour program on "The Future of Regulatory Takings at the Supreme Court," featuring our colleagues Joshua Thompson (Pacific Legal Foundation) and Paul Utrecht (Utrecht & Lenvin, LLP), with Jim Burling (PLF) moderating.

The program discussed Cedar Point Nursery v. Hassid, Knick v. Township of Scott, and Pakdel v. City and County of San Francisco and what might be on the horizon.

If you are a takings nerd, a must-listen.

2021 Brigham-Kanner Property Rights Conference (Sep. 30 - Oct. 1, 2021) - Still Time To Join Us

There's still plenty of time to register and join us for the 18th Annual Brigham-Kanner Property Rights Conference at the William and Mary Law School, Thursday and Friday, September 30 and October 1, 2021.

Yes, you may attend in-person, or remotely. The registration fees are very reasonable, ranging from $0 (yes, free!) to $200 (go here, and click "Tickets" for the details).

This year's Brigham-Kanner Property Rights Prize winner is Professor Vicki Been (NYU Law). The Conference includes presentations on:

• Remembering Toby Brigham
• The Role of Empirical Research in Defining the Scope of Constitutionally Protected Property Rights: A Tribute to Been
• The Relationship between Eminent Domain and Social and Racial Injustice (this is the panel on which we'll be presenting)
• Just Compensation Issues, Changing Public Uses, and Other Recent Developments
• The Interdependence of Property and First Amendment Rights
• The Distributional Implications of Land Use Regulation

Details on the agenda and the stellar faculty here.

In our opinion, this is the best one-day academy/bench/practicing bar conference on this topic. Really good stuff.

Register here. We'd love to see you in Williamsburg later this month. Or if that's not possible, join us for all or part of the day remotely.

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Registration Open Now: ALI-CLE Eminent Domain & Land Valuation Litigation Conference, Jan 26-29, 2022, Scottsdale

All the topics you want to know about, presented by top-notch faculty from across the nation. Sessions include:

• Keynote: Do Animals Have Property Rights?
• Did the Supreme Court Signal a New Direction in Property Rights in Cedar Point Nursery?
• Maximizing Relocation Benefits: Understanding the Law and Regulations to Ensure Fairness
• Challenging Public Use: Lessons From a 67-Day Trial
• COVID Takings
• Property Rights as Civil Rights
• Eminent Domain National Update
• Federal Court and the Daubert Challenge: How to Prepare
• How to Position Your Client for the Fallout When Projects Don't Get Built
• Rural Broadband and the Emerging Constitutional Challenges
• Are Precondemnation Entry Statutes Still Valid After Cedar Point Nursery?
• How Condemnor and Property Owners' Counsel Prepare the Battlefield
• How Will the Trillion Dollar Infrastructure Bill Impact Your Practice?
• Ethics
• ...and more, including a full slate of networking and social events!

We've sold out the last few years, so don't miss out. Room block now taking reservations. Registration and agenda information here.

Join us in Scottsdale in January!

Three Justices: After An Eviction Moratorium Expires, "eviction proceedings will be conducted exactly as they were before"

There's not a whole lot in the U.S. Supreme Court's order granting an injunction on appeal that suspends application of a part of New York State's eviction moratorium until such time as a cert petition is filed. The claims in that case are due process claims regarding the deprivation of a hearing, not takings. 

But check out the three-Justice dissent, authored by Justice Breyer (joined by Justices Sotomayor and Kagan).

Why? Because it may give some clues how they see the various federal, state, and local moratoria operating, and in doing so may have given us clues about how they might treat a takings challenge. As you know, several takings challenges are in the pipeline, including cases against the CDC moratorium, California's, and the City of Los Angeles's.

Check out page 3 of the dissent:

First, the legal rights at issue in this case are not “indisputably clear.” Applicants argue that CEEFPA denies landlords due process of law because once a tenant submits an attestation of financial hardship, evictions cannot proceed and the landlord cannot challenge the tenant’s claim of hardship, for example, in court. Respondent argues, however, that the law is best viewed not as a deprivation of the right to challenge a tenant’s hardship claim but as simply delaying the exercise of that right—as of now for less than three weeks until the law expires. After August 31, New York’s eviction proceedings will be conducted exactly as they were before CEEFPA’s enactment. Our precedents do not make it “indisputably clear” that this delay violates the Constitution. See Sosna v. Iowa, 419 U. S. 393, 410 (1975) (due process is not offended when “the gravamen of [the] claim is not total deprivation . . . but only delay”).

Order at 3 (Breyer, J., dissenting).

This should ring your Tahoe-Sierra "mere delay" bell,  friends, especially that bit about "eviction proceedings will be conducted exactly as they were before[.]" Same as it ever was. That may be correct in the narrow sense ("exactly" ... really?) that owners will not be prohibited from resorting to the eviction process to recover possession, but critically, it overlooks that it is very, very (very!) unlikely that much of the owed rent that has accumulated all these months is ever going to be collected or otherwise recovered. These moratoria all seem to rest on a divorced-from-reality assumption, which is, in our view, a very shaky foundation. 

The dissenters continued on the next page:

Second, applicants have not shown that critical or exigent circumstances justify our intervention. As I have said, CEEFPA’s pause on eviction proceedings will expire in less than three weeks, alleviating the hardship to New York landlords. Any hardship is further alleviated by pro-visions of CEEFPA that provide relief from foreclosure for property owners who own 10 or fewer dwelling units. See 2020 N. Y. Laws ch. 381, pt. B, subpts. A–B. Further, landlords’ hardship is alleviated because CEEFPA does not preclude them from seeking unpaid rent and other damages in a common-law action. Finally, respondent states that New York is currently distributing more than $2 billion in aid that can be used in part to pay back rent, thereby helping to alleviate the need for evictions. See 2021 N. Y. Laws ch. 53, p. 635.

While applicants correctly point out that there are landlords who suffer hardship, we must balance against the landlords’ hardship the hardship to New York tenants who have relied on CEEFPA’s protections and will now be forced to face eviction proceedings earlier than expected. This is troubling because, as noted, New York is in the process of distributing over $2 billion in federal assistance that will help tenants affected by the pandemic avoid eviction.

Order at 4 (Breyer, J., dissenting).

This should also give a clue how the Three Dissenters might treat a takings claim. With funds theoretically available to offset some of the back rent owed (if a property owner qualifies, if a ghosted former tenant cooperates, etc.) is that some kind of pressure valve for takings liability? 

Maybe we're just desperately looking for clues where none may exist. But the fact that this one broke along the same 6-3 lines as Cedar Point suggests to us that at least we might be getting a bit warm.

Order, Chrysafis v. Marks, No. 21A-8 (U.S. Aug. 12, 2021)

Takings Maven Dream Job® (x2): Property Rights Constitutional Litigator at Pacific Legal Foundation

You've got big dreams, you want fame...

If so, here's your chance: two (2!) Takings Maven Dream Jobs® are now available.

Pacific Legal Foundation requesting applications for positions as a Property Rights Constitutional Litigator. Job description includes "You will find and win the next important Supreme Court property rights case."

Oh, have we got your attention now?

You: An entrepreneurial freedom fighter with a passion for, and significant experience in, property rights litigation. You find and win cutting-edge property rights cases across the country. You are a national spokesperson for property rights—you speak at conferences, engage the media, and publish scholarship on property rights. You are a leader who will elevate PLF’s junior attorneys to be the best property rights litigators in the nation. You have demonstrated a dedication to public interest law and property rights throughout your career.

...

You will be a leader in PLF’s Property Rights Practice Group. From Nollan to Koontz to Knick to Cedar Point Nursery, PLF’s property rights litigation is unparalleled. (If you can’t describe these four cases without checking your notes, do not apply!) You will find and win the next important Supreme Court property rights case. Your ideas will help shape PLF strategy by identifying and litigating emerging property rights theories. And you will be recognized as a nationwide leader on property rights: giving speeches, attending conferences, appearing on radio and television, and publishing op-eds and scholarly articles on property rights.

You will also be a key contributor to PLF’s property rights practice group. You will work on teams with junior and senior attorneys, providing your expertise and knowledge and elevating the talent and skill of our attorneys. You will have the latitude to think big and the resources to execute. You will be at the forefront of shaping property rights for all Americans.

In a nutshell, we’re seeking someone who’s passionate about liberty and property rights, someone who is confident and magnanimous, and someone who is a bold and relentless freedom fighter.

Sound good? We made the jump earlier this year, now you can join in the fun.

You love coffee, and as we know, coffee is for closers!

More here, including application information and deadline.

CA4 Tells Landowner To Beat It (From Federal Court): 11th Amendment "Sovereign Immunity" Bars Suing State For Fifth Amendment Compensation In Federal Court

The U.S. Court of Appeals for the Fourth Circuit's opinion in Zito v. N.C. Coastal Resources Comm'n, No. 20-1408 (Aug. 9, 2021) is just the latest in a growing list of decisions about an issue we've been following (see here, here, here, here, and here for example), including the District Court's decision in this very case.

That issue is whether a property owner can sue a state for just compensation for a taking in federal court.

You know how that works. Knick held that local governments and officials can be sued in federal court for violating the federal constitution and for civil rights violations. Check. But it didn't expressly say anything about whether there's something different about a state or a state official (in their official capacity) that prohibits the same thing. After all, the Eleventh Amendment has been interpreted, it prohibits federal court lawsuits against states (or instrumentalities of a state) for money damages. Yes, there are a number of ways around that -- mostly involving prospective injunctive relief -- but the Eleventh Amendment's plain text limitations (citizens can't sue "another state" in federal court) has over time evolved into something more general, which the courts have labeled "sovereign immunity."

In Zito, the Fourth Circuit held that Knick's throwing back open the federal court door to takings claims did not address or otherwise undermine the usual 11th Amendment rule. Slip op. at 10. Similarly, the self-executing nature of the 5th Amendment's Just Compensation requirement did not alter that calculus. Slip op. at 11 ("So Knick did nothing new with respect to the self-executing nature of the Takings Clause in federal court.") (footnote omitted). Yes, Knick made Fifth Amendment private property rights equal with other rights (under Williamson County, these rights were definitely treated as second-class right), but it didn't elevate private property rights and merely subjected them to the same 11th Amendment limitations on other constitutional rights. Slip op. at 12-13.

Of course, there's an exception to the usual "sovereign immunity" states enjoy in federal court if there isn't a "reasonable, certain, and adequate" means to obtain compensation in state court. Such remedies exist, the Fourth Circuit concluded.

Beat it, and bring you federal takings case in a North Carolina court (deja vu all over again).

Disclosure: the property owner in this one is represented by colleagues at our law firm (we had no hand in the case).

There's a growing divergence in the way the lower federal courts handle these arguments. See this case from the Ninth Circuit, for example. There's also a growing academic thread that Eleventh Amendment "sovereign immunity" isn't a blanket stay in jail free card in certain cases. See here and here, for example. 

So what's next, a cert petition? Given that counsel in the case is the same fellow who brought us Knick (and who has a 2-for-2 win record at the Court), and who also earlier petitioned the Court on the 11th Amendment issue, we suspect there's a good chance something more is coming.  

Zito v. N.C. Coastal Resources Comm'n, No. 20-1408 (4th Cir. Aug. 9, 2021)

Join Us For The 39th Annual ALI-CLE Eminent Domain & Land Valuation Litigation Conference, Jan 26-29, 2022 (Scottsdale, AZ)

All the topics you want to know about, presented by top-notch faculty from across the nation. Sessions include:

• Property Rights as Civil Rights
• Eminent Domain National Update
• Just Relocation: Understanding the Law and Regulations to Ensure Fairness
• Challenging Public Use: Lessons From a 67-Day Trial
• COVID Takings
• Federal Court and the Daubert Challenge: How to Prepare
• Did the Supreme Court Signal a New Direction in Property Rights in Cedar Point Nursery?
• How to Position Your Client for the Fallout When Projects Don't Get Built
• Rural Broadband and the Emerging Constitutional Challenges
• Are Precondemnation Entry Statutes Still Valid After Cedar Point Nursery?
• How Condemnor and Property Owners' Counsel Prepare the Battlefield
• How Will the Trillion Dollar Infrastructure Bill Impact Your Practice?
• Ethics
• ...and more, including a full slate of networking and social events!

We've sold out the last few years, so don't miss out. Room block now taking reservations. Registration and agenda information here.

Join us in Scottsdale in January!

CA10 Deepens The Split: Williamson County's "Final Decision" Requirement Is Prudential, Not Jurisdictional

Iin North Mill Street, LLC v. City of Aspen, No. 20-1130 (July 27, 2021), the U.S. Court of Appeals for the Tenth Circuit held that a claim that the city's denial of a rezoning application to allow residential development effected a taking was not ripe because the city's process also allows a property owner to ask the city to allow site-specific development even if not in conformity with the current zoning, and the plaintiff had not availed itself of this process. Thus, the takings claim was not ready for judicial review under "final decision" Williamson County ripeness.

But the really interesting part of the opinion is a footnote. See slip op. at 15 n.9. There, the court noted that it is joining the majority of other courts in holding that "final decision" ripeness is not a matter of a lack of Article III jurisdiction. Rather, it is merely a "prudential" matter -- which means that it isn't some hard-line rigid rule, but can be overlooked and the case reviewed. The footnote notes (ha!) the circuit split, with the Tenth now joining the Second, Fourth, Fifth, Seventh, and Ninth in concluding it is prudential only, while the First and Eighth Circuits treat it as jurisdictional.

Justice Thomas noted the split in a case from a few years ago where he and Justice Kennedy dissented from denial of cert, so there's little doubt there's an actual and real divergence of analysis, if not a divergence of result. And this isn't the most clear area -- at least analytically -- but at the very least, this case resolved the intra-circuit district court split and came down on the side of prudential. See slip op. at 17-18.

Here, the Tenth Circuit concluded that even though the District Court was wrong when it dismissed the takings claim for lack of a final decision and held it lacked jurisdiction, the claim was nonetheless not one in which the court should have exercised its prudence and heard the claim anyway. The property owner might get that residential development if it went through the city's process to ask whether it might allow development that is contradictory to the zoning.

The owner argued that the city's ordinance doesn't actually allow it to approve residential development. And besides, the city's record of saying no residential development on this property shows that it was futile to ask "really?" The court rejected both arguments. 

Thus, the court concluded, all of the reasons for the Williamson County final decision rule are satisfied. We don't know whether the city has gone "too far," because we don't know yet how far it has gone.

North Mill Street, LLC v. City of Aspen, No. 20-1130 (10th Cir. July 27, 2021)

CA6: Rooker-Feldman Bars Federal Lawsuit Challenging State Court's Public Use Determination

What do you think about these facts in RLR Investments, LLC v. City of Pigeon Forge, No. 20-6375 (July 13, 2021), a decision by the U.S. Court of Appeals for the Sixth Circuit on what we might charitably call an obscure legal doctrine (Rooker-Feldman)?

City wanted some of RLR's property to build a walkway and replacement parking for RLR's parking that the walkway would displace. Eminent domain ensued. RLR objected to the take: no public use. The Tennessee trial court considering the condemnation suit disagreed, and concluded twice (once at the hearing on immediate possession, the other on a motion for summary judgment) that the taking was supported by a public use or purpose. 

Next step, valuation trial right?

Not in the view of the property owner, who, continuing to maintain that the taking was defective, filed its own civil rights lawsuit in federal court asserting that the city's taking lacked a public use or purpose under both the U.S. and Tennessee constitutions. The district court predictably dismissed, relying on the Rooker-Feldman doctrine, which prohibits federal district courts from reviewing the final judgments of state supreme courts. The Sixth Circuit affirmed.

But wait, you say, the the ruling being challenged is neither a final judgment, nor is it from the Tennessee Supreme Court. This was an interlocutory ruling on public use from a Tennessee trial court, right? What gives?

Well, despite this same court ruling not too long ago that "[a]bsent a claim seeking review of a final state court judgment, a federal court tempted to dismiss a case under Rooker-Feldman should do one thing: stop[,]" here we are with the Sixth Circuit affirming R-F dismissal in favor of an interlocutory trial court order. Most other circuits say that interlocutory is they key, and decline to apply R-F. But the Sixth Circuit goes a different way, concluding that an interlocutory ruling is a "judgment" for purposes of the doctrine. Slip op. at 8 ("Here, it’s clear that RLR asks us to review the state-court order of possession and that the order of possession counts as a judgment under Rooker-Feldman."). Since the public use determination is a judgment, and the federal civil rights action asserts the state court judgment is unconstitutional, that's the "type of review Rooker-Feldman forbids." Slip op. at 9.

We think only true Federal Courts uber-nerds will take joy in reading the Sixth Circuit opinion. There's a lot of mind-boggling minutiae, and very little about the stuff that readers of this blog come here for (property! eminent domain! takings!). But you may want to read this one for a couple of reasons.

First, this one may not be over just yet. With a panel merely applying existing circuit precedent, see slip op. at 19 ("our precedent circumscribes our jurisdiction"), an acknowledged circuit split, see slip op. at 14 ('we are hesitant to deepen any conflicts between the circuits"), and a dissent from one member of the panel, see slip op. at 20 (interlocutory orders should not be included within R-F doctrine), we may see more on the en banc front or even further.

Second, the case's posture it going to ring some bells for us takings types, and it may remind you of those situations where even after a trial court holds that a taking is for a public use or purpose, the owner still thinks that it isn't. Does it make sense in those cases to go forward with a trial of the compensation question when -- if the owner is right about the lack of public use or purpose -- a compensation trial would not be necessary? Some places, you get an immediate interlocutory appeal on public use as of right. But in others no -- you have to spent the effort, time, and money to adjudicate compensation before you can appeal the foundational ruling. In the latter case, can you run to federal court to challenge the adverse public use ruling? 

This case tells you no. But maybe not for the right reason. We're certainly not Rooker-Feldman mavens, so we can't really say whether the panel majority was correct when it concluded that R-F prevented the district court from exercising jurisdiction over the property owner's civil rights claim. But we do read and nod our heads at the dissent's note that the more straightforward route to the same result might be plain-old abstention, under the doctrine that counsels federal district courts to avoid considering cases where there's an ongoing, concurrent state proceeding:

Furthermore, when a litigant files suit in federal court before the state court in the parallel proceeding enters a judgment that carries preclusive effects, the federal courts have tools at their disposal to ensure that judicial resources are not wasted. For example, under the doctrine of Colorado River abstention—which the City raised as an alternative argument in its motion to dismiss—“a federal district court may abstain from exercising its subject matter jurisdiction due to the existence of a concurrent state court proceeding, based on ‘considerations of wise judicial administration, giving regard to conservation of judicial resources and comprehensive disposition of litigation.”’

See slip op. at 32 (Clay, J., dissenting) (citations omitted).

RLR Investments, LLC v. City of Pigeon Forge, No. 20-6375 (6th Cir. July 13, 2021)

Another SCOTUS Property Rights Win, This Time On Williamson County's "Final Decision" Requirement

Another day, another property rights decision from SCOTUS. This time, the unanimous per curiam opinion in a case we've been following, Pakdel v. City & County of San Francisco, No. 20-1212 (June 28, 2021).

[Disclosure: our PLF colleague Jeff McCoy is lead counsel on this case, and we pitched in with help on the petition and related.]

Because we're directly involved in this one, we're not going to take a deep dive analysis. But the opinion is short, and the result clear: grant, vacate, remand, with instructions:

On remand, the Ninth Circuit may give further consideration to these claims in light of our recent decision in Cedar Point Nursery v. Hassid, ante, p. ___.

Slip op. at 3, n.*.

The Pakdels sued San Francisco for a regulatory taking because of the city's requirement that as a condition of converting a tenancy-in-common to a condominium, the owners must first offer any tenant a lifetime lease. The Pakdels twice requested exemptions from the lifetime lease requirement, but the city denied both requests. That sounds like a "final decision" that qualifies under Williamson County, no? After all, the reviewing court knows exactly what uses the city is allowing or requiring, and that is the whole point of the final decision requirement. 

No, held the panel, it turned out that the Pakdels had "Committed a procedural default during the administrative process" and this meant that not only was their claim not ripe for not obtaining a final decision from the city, their claim could never become ripe because it was too late in the administrative process to "un-default" the default.

If that strikes you as weird, you are not alone. Not only did Judge Bea dissent from the panel decision, nine judges dissented from the denial of the en banc petition. The dissenters concluded that this isn't really a final decision requirement, but rather a way of backing into an administrative exhaustion requirement, something the Supreme Court has long rejected in section 1983 cases, and which the Williamson County final decision requirement doesn't really address. The dissenters concluded that the owners' failure to fulfill administrative requirements "is an exhaustion requirement pure and simple[.]" Dissent at 10. It's one thing to say they didn't go through the admin process, another to say the city hasn't reached a final decision about what they can do with their property.

Looks like the entire Supreme Court agreed:

But, contrary to the Ninth Circuit’s view, administrative missteps do not defeat ripeness once the government has adopted its final position. See Williamson County, 473 U. S., at 192–193 (distinguishing its “finality requirement” from traditional administrative “exhaust[ion]”). It may very well be, as Judge Bea observed, that misconduct during the administrative process is relevant to “evaluating the merits of the . . . clai[m]” or the measure of damages. 952 F. 3d, at 1170, n. 2 (dissenting opinion); cf. Palazzolo, 533 U. S., at 625. For the limited purpose of ripeness, however, ordinary finality is sufficient.

. . .

Given that the Fifth Amendment enjoys “full-fledged constitutional status,” the Ninth Circuit had no basis to relegate petitioners’ claim “‘to the status of a poor relation’ among the provisions of the Bill of Rights.” Knick, 588 U. S., at ___ (slip op., at 6).

Slip op. at 7.

Pakdel v. City & County of San Francisco, No. 20-1212 (U.S. June 28, 2021) (per curiam)

11th Circuit Affirms Penn Central Jury Verdict For Rezoning Resulting In 86% Loss Of Value

More good takings news, hot off the press.

Before Cedar Point came down last week, we were all set to let you know about the Eleventh Circuit's opinion in South Grande View Dev. Co., Inc. v City of Alabaster, No. 18-14044 (June 21, 2021), in which the court affirmed a jury verdict that the city's reduction in the developable density on residential-zoned parcel (from R-7 and R-4) to R-2) was a Penn Central regulatory taking. 

The city appealed on an evidentiary issue, arguing that the jury should not have heard evidence of its reasons for downzoning the property, which were not relevant to the takings question and only went to whether the government acted arbitrarily and capriciously (a due process inquiry). The city also raised a ripeness question: the owner had not sought a variance from application of the new zoning, and indeed had never asked the city to apply the R-2 zoning to the property. 

The Eleventh Circuit rejected both arguments.

First, the city had made a final decision applying the R-2 zoning to the property:

• "[O]ur binding precedent holds that a zoning ordinance can itself be a final decision on the merits." Slip op. at 11.
• The rezoning only applied to South Grande's property, and no other. Unlike the rezoning in Williamson County, which applied to a wide swath of properties, this one was specifically targeted at South Grande. Thus, "there was no ambiguity as to how a general plan would be applied to a specific project—the zoning ordinance itself was the City’s final decision on the matter." Slip op. at 14.

Second, the court agreed that evidence of the city's motive for the downzoning was not relevant to the takings issue, but that the jury hearing this irrelevant evidence was harmless error. The owner introduced evidence of the city's motive, arguing it was part of the "character of the government action" Penn Central factor. Slip op. at 21. But Lingle, the court concluded, made that evidence only relevant to a due process inquiry and not to takings. See slip op. at 22-23 ("The Lingle court explicitly rejected the argument that the Penn Central factor of the “character of government action” addressed the purpose of the regulation[.]"). But no harm, no foul, and this was "not reversible error." Id. at 25-26.

Verdict affirmed. The reason the error was harmless (and here's the really important part of the opinion, in our opinion), was because "substantial, permissible evidence produced at trial supports the jury's [Penn Central] verdict." Slip op. at 26.

That evidence:

• Developing the parcels for just residences per acre was not economically feasible.
• The owner spent a "significant sum of money preparing the property for R-4 homes." Slip op. at 24.
• Neither the parties nor the court looked at whether the owner's rights had "vested" under Alabama law. In other words, Penn Central does not turn on a race to vest.
• The owner also testified that it "did not finish" developing the properties because of a market downturn "and they were going to wait until after the recession to continue developing." Slip op. at 8.
• The owner's purchase price and the amount later spent to develop the property counted towards its investment-backed expectations. Slip op. at 8.
• The before value of the property: $3.52 million. The after value: $500k. An 86% decline due to the regulation. Whether this qualified as a substantial loss was left to the jury, and the court did not apply the (wrong) rule that courts often do and conclude that although 86% is significant, it isn't enough.

In closing, the court noted that the city didn't put on contrary evidence of value, and that it only challenged the owner's valuation evidence "for the first time on appeal." Thus, the city had forfeited those arguments and the court did not consider them. 

Definitely check out this opinion and the facts. There's some gems there.

South Grande View Dev. Co., Inc. v. City of Alabaster, No. 18-14044 (11th Cir. June 21, 2021)

Links From Today's Oregon Eminent Domain Conference

Earlier today, I presented the "National Takings Update" at The Seminar Group's Eminent Domain in Oregon conference. It was good to see old friends and colleagues again, even though on-screen and not in-person. Hopefully next time we'll all be able to join together.

Here are the links to the cases we discussed that are not in your written materials (mostly because they were issued after I submitted my materials):

• Ill App (unpub, unfortunately) Strikes Down Taking For Road To Be Owned By The Public
• California Trial Court: No Greater Public Interest In Town Seizing Private Water Company To Operate It Itself (Generic "Vision Statements" Don't Count)
• Listen (Or Read) As SCOTUS Hears Arguments In A (Sorta) Eminent Domain Case
• What If A Court Invalidates A Taking, But They've Already Taken It?
• How "Res Judicata" Is A Failed Condemnation?
• Sixth Circuit Says No To Res Judicata As The Latest Williamson County Workaround
• New Law Review Article (Ours) - "Evaluating Emergency Takings: Flattening the Economic Curve," 29 Wm. & Mary Bill of Rights J. 1145 (2021)
• Louisiana SCT: No Statutory Attorneys' Fees For Pipeline Taking - But LA Constitution's Just Comp Clause Requires Owners Recover "The Full Extent" Of Their Loss (Which Includes Fees)

Until next time!

Mark Your Calendars: 2021 Brigham-Kanner Property Rights Conference, Williamsburg, Virginia, Sept 30-Oct 1 (in-person)

Mark your calendars for September 30 - October 1, 2021, and join us at the William and Mary Law School in Williamsburg, Virginia for the 18th Annual Brigham-Kanner Property Rights Conference. It's planned to be in-person, so when we mean "join us" we really mean join us.

This year the Conference will recognize the lifetime work of Professor Vicki Been (NYU Law) with the Brigham--Kanner Property Rights Prize. As noted in the Law School's press release:

The Brigham-Kanner Property Rights Prize is named in honor of the lifetime contributions to property rights of Toby Prince Brigham, founding partner of Brigham Moore, LLP, and Gideon Kanner, professor of law emeritus at Loyola Law School in Los Angeles. Brigham died earlier this month in Miami. A true legend in the law, he was esteemed by colleagues for the invaluable counsel, knowledge and skills he possessed and shared so generously. The prize is presented annually to a scholar, practitioner or jurist whose work affirms the fundamental importance of property rights.

Been is the Judge Edward Weinfeld Professor of Law at NYU School of Law, an Affiliated Professor of Public Policy of the NYU Wagner Graduate School of Public Service, and Faculty Director of NYU’s Furman Center for Real Estate and Urban Policy. Her scholarship focuses on the interplay of land use, urban policy and housing. She is currently on leave from NYU, serving as Deputy Mayor for Housing and Economic Development for the City of New York. 

Among other topics, Been has examined inclusionary zoning, historic preservation, affordable housing, gentrification, mortgage foreclosure, racial and economic integration, community benefit agreements, and the effects of supportive housing developments on neighbors. She often uses the City of New York as her laboratory.

Been also writes about the Fifth Amendment prohibition against the taking of property without just compensation, environmental justice, and international protections for property owners. She is a co-author of a leading land use casebook, Land Use Controls.

Save the date, plan on joining us (Williamsburg is great in the fall), and stay tuned for the full agenda and speaker list, as well as how to register.

Sixth Circuit Says No To Res Judicata As The Latest Williamson County Workaround

Check out the U.S. Court of Appeals for the Sixth Circuit's opinion in Harrison v. Montgomery County, No. 20-4-51 (May 11, 2021). It's short, readable. And, most importantly, involves a subject that's near and dear: takings, and the myriad potential traps that await an unsuspecting property owner making such a claim.

If you've ever asserted a takings claim, you know what we mean. The other side may argue you are too late (statute of limitations, for example), or too early (ripeness, in one form or another), or, remarkably, you are both too early and too late (yeah, that happens). Or simply that property questions are not worthy of the court (abstention). And these arguments are often not presented in a clear way -- more like "here's a bunch of reasons to throw this case out Judge, see which one you like" -- and navigating through them is often like dealing with the Gordian knot.

Harrison wasn't much different, but the court -- thankfully -- parsed it out.

There, the takings claim challenged Ohio's scheme that allows municipal boards of revision to foreclose tax delinquent properties then transfer them to a land bank instead of selling the properties. An owner may reclaim the property by squaring up the back taxes owed, or may challenge the process in the board of revision, or may appeal the board's decision in a state court.

The program differs from the usual process (foreclosure followed by sale at auction) by allowing municipalities to retain the entire value of the properties without regard to the amount of the tax delinquency. By contrast, in the usual process the government only has a right to the amount of the sales proceeds to cover the delinquent taxes plus fees, and if the proceeds exceed the amount owed in taxes, the government is required to provide the owner with the difference.

The land bank scheme was a taking the (former) owner argued because he had no way to get the surplus back, and he sued. The district court dismissed, concluding that the owner could have -- and therefore must have -- raised a takings defense in either the board of revision proceedings on on appeal in an Ohio state court. Because the owner did not raise a takings defense, and the board's decision is now final because the owner didn't appeal, he was precluded from raising takings in a subsequent complaint. Could have raised a takings claim in a now-final case but didn't = res judicata. 

The Sixth Circuit disagreed, primarily because Harrison was not required to have raised a takings defense in the administrative process. See slip op. at 10 ("But whether Harrison could have raised her takings claim on appeal is a far cry from insisting she had to.").

Harrison conceivably might have raised a takings defense in the board (although as noted below, that would have been anticipatory pleading), or in the course of an appeal to Ohio's courts (presumably under the state's administrative procedures act). But he did neither. Before Knick, that might have been a problem, the Sixth Circuit concluded. But not after Knick:

Harrison had no obligation to invoke the federal takings clause before the Board of Revision to stop title transfer in the first place. In the State’s view, she should have answered the foreclosure complaint by arguing that the takings clause barred transferring title to the property. But, again, this approach shortchanges the reality that Williamson County’s first requirement—that there be a “final decision” effecting a taking—remains in place after Knick. The taking, so far as federal law is concerned, happened when the Board adjudicated the foreclosure of Harrison’s property through the land bank process, not before.

Besides, how could Harrison have known to bring a takings-based defense in the first place? The Board did not find that her home’s value outstripped the total delinquent taxes until it decided the foreclosure action. The final decision came a year after the County treasurer brought proceedings and nearly ten months after Harrison answered the complaint. Consider, too, that in the foreclosure complaint, the County Treasurer asked that the property “be sold according to law” or that it be “conveyed to a township.” R.17-2 at 7. As the County concedes, its complaint did not establish that Harrison’s property would be transferred to a land bank. See Appellant’s Br. at 7. Had the County sold the property at a public auction, Ohio law would have permitted Harrison to recover any surplus. See O.R.C. § 5721.20. Until it became clear the State would seize Harrison’s surplus equity by transferring title—a decision reached only when the Board adjudicated the foreclosure—no taking occurred. See Williamson Cnty., 473 U.S. at 186.

Slip op. at 9.

In other words, any attempt by Harrison to assert a takings defense would likely have been challenged as not ripe by the Town for lack of a "final decision." 

So yes, if you (1) can raise a ripe takings defense in admin proceedings, and (2) you choose to do so, and (3) you later fail to administratively appeal (administrative res judicata or full faith and credit), you may be precluded from asserting the same argument in a later complaint. See slip op. at 10 ("if a plaintiff chooses to pursue an administrative appeal, claim preclusion may bar a later attempt to seek the same relief"). But you don't have to raise the defense, especially when would have been too early to do so.

Before remanding the case to the district court to allow it to address the merits of Harrison's takings claim, the Sixth Circuit posed this missive, and gave the parties and the court below a hint on how the panel sees it:

That leaves the merits of Harrison’s federal takings claim, which implicates debates going back to the founding. On the one hand, in the words of Justice Chase, Harrison’s argument rests on the venerable proposition that “a law that takes property from A. and gives it to B . . . is against all reason and justice.” Calder v. Bull, 3 U.S. 386, 388 (1798). “If, on the other hand,” in the words of Justice Iredell, “the Legislature . . . shall pass a law, within the general scope of their constitutional power, the Court cannot pronounce it to be void, merely because it is, in their judgment, contrary to the principles of natural justice. The ideas of natural justice are regulated by no fixed standard: the ablest and the purest men have differed upon the subject; and all that the Court could properly say, in such an event, would be, that the Legislature (possessed of an equal right of opinion) had passed an act which, in the opinion of the judges, was inconsistent with the abstract principles of natural justice.” Id. at 399. As a court that specializes in sequels, not premiers, we think it prudent to allow the district court to consider the merits of this claim in the first instance. In doing so, it may wish to solicit historical evidence about the meaning of a taking in 1791 and 1868 with respect to this kind of government action. Should either party appeal the district court’s ruling, this panel stands ready to handle the appeal promptly.

Slip op. at 11-12.

This one isn't over, so we shall keep following along. Disclosure: my law firm colleagues at Pacific Legal Foundation filed an amicus brief in support of the property owner.

Harrison v. Montgomery County, No. 20-4051 (6th Cir. May 11, 2021)

New L Rev Article: Knick Won't Mean Much Until Federal Courts Get Over "Strong Distate, If Not Outright Contempt" For Land Use Matters

R.S. Radford's most-recent article, Knick and the Elephant in the Courtroom: Who Cares Least About Property Rights? in the latest issue of the Texas A&M Journal of Property Law, should be next on your to-read list. 

Here's the summary of the article:

Throughout the thirty-four-year history of Williamson County, one fact was taken for granted. Never directly mentioned but always looming in the background of two rounds of oral argument before the Supreme Court in Knick was the premise that relegating takings claims to state court made it less likely that property owners would prevail on those claims than if they could be filed in federal court in the first instance. This Article examines that premise and finds little support for it in the historical record.

Part I of this Article discusses Williamson County and highlights the logical, doctrinal, and procedural confusion associated with the opinion, both in its conception and as the consequences of the ruling were revealed over time. It concludes with a brief review of the Knick decision, which finally laid Williamson County to rest. Part II turns to the “elephant in the courtroom”—the generally unspoken assumption that reopening the federal courthouse doors to takings claims will significantly increase the number of claims that result in awards of compensation. Part II also points out that, both before Williamson County and after, federal courts have expressed a strong distaste, if not outright contempt, for becoming involved in land-use disputes. A review of the pre-Williamson County practice of invoking abstention to clear the federal judiciary’s calendar of takings cases is followed by an examination of the extremely low success rate of takings cases that have managed to avoid both Williamson County and abstention and adjudicated on their merits in federal court. A case study of Guggenheim v. City of Goleta exemplifies the Ninth Circuit’s policy of dismissing takings challenges to regulations that predate a plaintiff’s acquisition of title—in direct contravention of the Supreme Court’s ruling in Palazzolo v. Rhode Island. Finally, the Ninth Circuit’s most recent foray into takings law, Bridge Aina Le’a v. State of Hawaii Land-Use Commission, raises the question of whether the Circuit is flouting the Seventh Amendment’s Re-examination Clause in its eagerness to set aside jury verdicts of takings liability. Part IV concludes this Article by reminding the reader that Knick has essentially returned federal takings jurisprudence to where it stood in 1984—before Williamson County cut off its development by diverting most takings cases to state court. How the federal judiciary responds to the Knick challenge will set the parameters of takings law for the twenty-first century.

7 Tex. A & M L. Rev. at 579-580 (footnotes omitted).

Radford highlights a point that we've made also (thanks for the shout-outs, R.S.) - that until the courts clean up substantive takings doctrine, the availability of a federal forum - while it will help - won't be a true game-changer.

The entire article is worth your time.

R.S. Radford, Knick and the Elephant in the Courtroom: Who Cares Least About Property Rights?, 7 Tex. A & M...

Fed Cir: FCC Giving Isn't A Taking - Don't Disguise Your Challenge To Reduction In Subsidies As A Takings Case

Go read the Federal Circuit's opinion in Sandwich Isles Communications, Inc. v. United States, No. 20-1446 (Apr. 1, 2021), especially the very-dense fact section. There's a lot there: acronyms, bureaucracy-speak, family-insider politician dealings, tax fraud convictions, and the like. So what's a case like this doing in the Court of Federal Claims and the Federal Circuit, which (for our purposes) deals with takings claims against the United States?

Skip forward to page 7, where we get to the heart of the plaintiff's complaint:

In January 2019, SIC filed this suit in the Claims Court, alleging that the cumulative effect of the FCC’s reductions in SIC’s federal subsidies resulted in a taking of property without just compensation.

Slip op. at 7 (footnote omitted).

Yes, you read that right: this was a violation of the Givings Clause.

Consequently, the CFC dismissed the complaint for lack of subject matter jurisdiction. First, because this really sought review of the FCC's actions (and you know you don't go to the CFC for that kind of review, you go to the court of appeals. Second, because there's no property interest "in receiving support payments from FCC-administered funds." Slip op. at 8.

The Federal Circuit affirmed. You can't bring a Tucker Act claim (a "gap filler" as the court noted) when Congress has otherwise provided a comprehensive, detailed statute that provides its own remedies. The Federal Communications Act is one of those latter types. Comprehensive. Detailed. With a specific judicial review provision. The question the Federal Circuit resolved was whether in the Communications Act, Congress intended to withdraw Tucker Act jurisdiction. Yes, the court concluded (and it wasn't a new issue). In a recent 2018 decision, the Federal Circuit held that the Communications Act did just that. Examining the "true nature" of the plaintiff's claim, the court concluded that it really just seeks review of the FCC's order:

In analyzing whether subsection 402(a) applies, we “must look to the true nature of [the plaintiff’s] claim, not how plaintiff characterize[s] it.” Folden, 379 F.3d at 1359 n.13. Here, SIC’s takings claim is based on its disagreement with FCC decisions regarding the amount of subsidies SIC could receive from the USF and NECA pools. SIC also takes issue with the FCC’s 2013 order, which denied SIC’s petition for waiver of the $250 per-line, per-month cap on high-cost universal service support. These allegations take aim at FCC orders and seek to “enjoin, set aside, annul, or suspend” them. See 47 U.S.C. § 402(a). Because SIC’s takings claim challenges FCC actions and orders governed by 47 U.S.C. § 402(a), the statutory scheme set forth in the Communications Act displaces the Claims Court’s Tucker Act jurisdiction.

Slip op. at 14-15. No we didn't, the plaintiff asserted, "this is a takings case, not a challenge to the order."

Sorry, no deal held the court. The claim "is premised on [the plaintiff's] disagreement with the amount of subsidy funding it has received from the FCC-administered funds[.]" Slip op. at 15. Go take it up -- including your takings claim -- with the FCC as the statute requires.

SIC also maintains that it could not have raised its takings claim as a challenge to any FCC order because “a takings claim asserted in an appeal from the FCC’s order would be unripe.” Appellant’s Br. 12–13. At the same time, however, SIC alleges that “a confiscatory rate takings claim is ripe when its impacts are known” and the “impacts of the FCC’s 2011 rates have been fully manifested.” Id. ready ripe when SIC filed its 2015 petition.” Id. SIC’s ripeness allegations, which seem to be a moving target, miss the mark. The fact remains that SIC has not raised its takings claim before the FCC, which it was required to do be-fore seeking judicial review. See Williamson Cnty. Reg’l Planning Comm’n v. Hamilton Bank of Johnson City, 473 U.S. 172, 194–95 (1985) (“[A] claim that the application of government regulations effects a taking of a property interest is not ripe until the government entity charged with implementing the regulations has reached a final decision regarding the application of the regulations to the property at issue.”), overruled on other grounds by Knick v. Twp. of Scott, 139 S. Ct. 2162, 2179 (2019).

Slip op. at 15-16.

What about the CFC's alternative basis for dismissal, the conclusion that the plaintiff does not possess a property interest in a government subsidy? No analysis from the Federal Circuit, other than "[w]e have considered SIC's remaining arguments and find them unpersuasive." Slip op. at 17.

There's a lesson this case teaches: takings claims are takings claims, and not a desperate last-line-of-defense solution to every legal problem.

Sandwich Isles Communications, Inc. v. United States, No. 20-1446 (Fed. Cir. Apr. 1, 2021)